The seriousness of allegations in the financial industry cannot be overstated. Recently, a pending customer dispute has been filed against Kevin Adam, a broker and investment advisor currently affiliated with CETERA ADVISORS LLC. The claimant alleges misrepresentation and breach of fiduciary duty, with a reported loss of $40,000. This case, filed on 9/8/2023, is currently under investigation by Haselkorn & Thibaut, a national investment fraud law firm.
Allegation’s Seriousness and Case Information
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Allegations of misrepresentation and breach of fiduciary duty are grave charges in the financial world. In this case, the claimant asserts that Kevin Adam did not accurately represent the investment and did not act in the client’s best interest, leading to a significant financial loss. The case is listed under the FINRA CRD number 2393993.
CETERA ADVISORS LLC, the firm associated with the advisor, has been registered with the Central Registration Depository (CRD) since 03/23/2007. The firm is involved in various financial services, including fixed annuity – a type of investment that the claimant had engaged in.
In his defense, Kevin Adam states that he discussed all fees and expenses with the client on multiple occasions, and the client was aware of these before investing. He also asserts that the recommended investment provided portfolio diversification and tax benefits for the client.
Explanation in Simple Terms and the FINRA Rule
Financial misrepresentation involves providing inaccurate, misleading, or incomplete information about an investment. Breach of fiduciary duty, on the other hand, occurs when a financial advisor fails to act in the best interest of the client. Both allegations are serious offenses under the Financial Industry Regulatory Authority (FINRA) rules.
According to FINRA Rule 2111 (Suitability), brokers must have a reasonable basis to believe that a transaction or investment strategy is suitable for the customer. This rule is based on the information obtained through reasonable diligence to ascertain the customer’s investment profile. A customer’s investment profile includes the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, and risk tolerance.
The claimant’s allegations against Kevin Adam suggest a possible violation of this rule, which could lead to severe penalties if proven.
Why It Matters for Investors
Investors place their trust and hard-earned money in the hands of financial advisors, expecting them to act in their best interest. Breach of this trust can lead to significant financial losses, as seen in this case. Therefore, investors should be aware of their rights and the obligations of their advisors.
Allegations like these underscore the importance of transparency and integrity in the financial industry. They also highlight the need for regulatory bodies like FINRA and legal firms like Haselkorn & Thibaut that protect investors from malpractice.
Investors affected by such malpractices can seek compensation through FINRA Arbitration, a dispute resolution process that is quicker, less formal, and generally less expensive than court litigation.
Red Flags for Financial Advisor Malpractice and How Investors Can Recover Losses
Investors should be vigilant for red flags that may indicate financial advisor malpractice. These include frequent trading to generate commissions (churning), unsuitable investment recommendations, failure to diversify investments, and unauthorized trading, among others.
If you suspect malpractice, it’s crucial to take action promptly. Haselkorn & Thibaut, with over 50 years of experience and a 98% success rate, specializes in helping investors recover losses due to financial advisor malpractice. They offer a free consultation and operate on a “No Recovery, No Fee” policy. You can reach them at their toll-free number, 1-800-856-3352.
Remember, as an investor, you have rights. Don’t hesitate to seek help if you believe those rights have been violated.
