Max Birkinbine, a broker and investment advisor associated with Ausdal Financial Partners, Inc. (CRD 7995) in Minnesota, is facing allegations of unsuitable investment recommendations, breach of fiduciary duty, negligence, and violation of Regulation Best Interest (Reg BI). The customer dispute, filed on January 19, 2024, and currently pending, involves investments in GWG L Bonds and seeks damages of $500,000.
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a Forbes article, investment fraud costs Americans billions of dollars each year, with the elderly being particularly vulnerable to fraudulent schemes and unsuitable investment recommendations.
Understanding the Allegations and FINRA Rules
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The allegations against Max Birkinbine center around the suitability of investment recommendations, particularly concerning GWG L Bonds. FINRA Rule 2111, known as the “Suitability Rule,” requires brokers to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer, based on the customer’s investment profile. This profile includes factors such as age, financial situation, investment objectives, and risk tolerance.
Additionally, the allegation of breach of fiduciary duty suggests that Birkinbine may have failed to act in the best interests of his client. Investment advisors are held to a higher standard than brokers and are required to prioritize their clients’ interests above their own.
Negligence and violation of Reg BI are also serious accusations. Reg BI, implemented by the SEC in 2020, requires broker-dealers to act in the best interest of retail customers when making investment recommendations, providing greater transparency regarding conflicts of interest and the costs associated with investments.
The Importance for Investors
This case highlights the significance of working with trustworthy and ethical financial professionals. Investors rely on the expertise and guidance of their brokers and investment advisors to make informed decisions about their financial future. When an advisor fails to prioritize their clients’ best interests or recommends unsuitable investments, it can result in substantial financial losses.
GWG L Bonds, the investment product at the center of this dispute, have been the subject of scrutiny and controversy. In April 2022, GWG Holdings, Inc., the issuer of GWG L Bonds, filed for Chapter 11 bankruptcy protection, leaving investors uncertain about the future of their investments. This case underscores the importance of thoroughly researching and understanding the risks associated with any investment product before committing funds.
Recognizing Red Flags and Seeking Help
Investors should be vigilant in recognizing potential red flags that may indicate financial advisor malpractice. Some warning signs include:
- Recommendations that seem too good to be true or inconsistent with the investor’s risk tolerance and investment objectives
- Lack of transparency regarding fees, commissions, and potential conflicts of interest
- Pressure to make quick investment decisions without sufficient time to review and understand the implications
If an investor suspects that they have been the victim of financial advisor malpractice, it is crucial to seek help from experienced professionals. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Max Birkinbine and Ausdal Financial Partners, Inc. The firm has over 50 years of combined experience and a 98% success rate in helping investors recover losses through FINRA arbitration.
Haselkorn & Thibaut offers free consultations to investors who may have been affected by financial advisor misconduct. Their “No Recovery, No Fee” policy ensures that clients can seek justice without upfront costs. Investors can contact the firm’s toll-free number at 1-888-885-7162 to discuss their case and explore their options for recovering losses.
As the case against Max Birkinbine unfolds, it serves as a reminder of the importance of working with reputable financial professionals and remaining vigilant in protecting one’s investments. By staying informed and seeking help when needed, investors can safeguard their financial future and hold accountable those who breach their trust.
