Investment fraud is a serious issue that can result in significant financial loss for investors. One such case currently under investigation involves allegations against Lawrence Greenfield, a financial advisor previously associated with ARETE Wealth Management, LLC and LPL Financial LLC (CRD 6413). The allegations revolve around unsuitable investment recommendations made in 2017, with the client seeking a substantial sum of $950,000 in damages. The case, identified as 23-02389N, is pending as of September 12, 2023. The investments in question are categorized as ‘Alternative Investments’.
The Allegation Explained & The FINRA Rule
Table of Contents
The allegation against Greenfield is a serious one. In simple terms, the client alleges that the advisor recommended investments that were not suitable for their financial situation or risk tolerance. This is a violation of FINRA Rule 2111, which requires that a firm or associated person have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer.
Furthermore, the rule states that the recommendation is based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose.
The Importance for Investors
Investors trust their financial advisors to provide sound, suitable advice based on their unique financial situations and goals. When a financial advisor fails in this duty and recommends unsuitable investments, it can result in substantial financial losses. This case serves as a reminder of the importance of understanding the investments being recommended and ensuring they align with one’s financial goals and risk tolerance.
Furthermore, it underscores the need for investors to be vigilant and proactive in monitoring their investments and the actions of their advisors. Investors should not hesitate to question their advisors and seek second opinions when necessary.
Red Flags & Recovery of Losses
Investors should be aware of certain red flags that may indicate financial advisor malpractice. These include frequent buying and selling of securities (churning), unsolicited investment recommendations, changes in account managers, and significant account losses.
If an investor suspects malpractice, they should immediately seek legal advice. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating this case. With over 50 years of experience and a 98% success rate, Haselkorn & Thibaut has successfully recovered financial losses for investors through FINRA Arbitration.
FINRA Arbitration is a quicker, less formal, and often less expensive alternative to litigation, and it can help investors recover losses resulting from investment fraud or malpractice. Haselkorn & Thibaut operates on a “No Recovery, No Fee” policy and offers free consultations to clients. They can be reached at their toll-free number, 1-800-856-3352.
