Randy Birkinbine, a broker and investment advisor with Ausdal Financial Partners, Inc. (CRD 7995) in Minnesota, is facing serious allegations of misconduct related to the sale of GWG L Bonds. The pending customer dispute, filed on January 19, 2024, accuses Birkinbine of suitability issues, breach of fiduciary duty, negligence, and violation of Regulation Best Interest (Reg BI). These allegations highlight the potential risks investors face when working with financial advisors who may not always act in their best interests.
According to the disclosure on Birkinbine’s FINRA BrokerCheck report (CRD #2008599), the client is alleging damages of $500,000. The case is currently pending, and no resolution has been reached at this time. Haselkorn & Thibaut, a national investment fraud law firm, is actively investigating Randy Birkinbine and Ausdal Financial Partners, Inc. for their role in the sale of these high-risk, illiquid investments.
Investment fraud and bad advice from financial advisors can have devastating consequences for investors. According to a Bloomberg article, the COVID-19 pandemic has seen a surge in investment fraud, with victims losing more money than ever before. It is crucial for investors to be vigilant and to thoroughly research their financial advisors and the investments they recommend.
Understanding the Allegations and FINRA Rules
Table of Contents
The allegations against Randy Birkinbine are serious and involve multiple violations of FINRA rules and industry standards. Let’s break down each allegation:
Suitability
FINRA Rule 2111 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. If Birkinbine recommended GWG L Bonds without properly considering his client’s profile, he may have violated this rule.
Breach of Fiduciary Duty and Negligence
As an investment advisor, Randy Birkinbine owes his clients a fiduciary duty, which means he must put his clients’ interests ahead of his own. Negligence occurs when a broker fails to exercise the level of care that a reasonably prudent person would use in similar circumstances. If Birkinbine breached his fiduciary duty or acted negligently in recommending GWG L Bonds, he may be liable for any resulting losses.
Violation of Regulation Best Interest (Reg BI)
Reg BI requires brokers to act in the best interest of their retail customers when making recommendations. This means that brokers must not place their own interests ahead of their customers’ interests. If Randy Birkinbine violated this rule by recommending GWG L Bonds that were not in his client’s best interest, he may face consequences from FINRA and the SEC.
The Impact on Investors
The allegations against Randy Birkinbine and the potential misconduct in the sale of GWG L Bonds can have significant consequences for investors. When a broker recommends unsuitable investments or fails to act in their client’s best interest, investors can suffer substantial financial losses.
Risks Associated with GWG L Bonds
GWG L Bonds are high-risk, illiquid investments that may not be suitable for all investors. These bonds are typically used to fund the purchase of life insurance policies, and their performance is dependent on the ability of GWG Holdings to generate returns from these policies. Investors in GWG L Bonds face risks such as:
- Lack of liquidity, as these bonds are not easily sold on the secondary market
- Potential for default if GWG Holdings is unable to meet its financial obligations
- Exposure to the life insurance market and the risk of insured individuals living longer than expected
Protecting Your Investments
Investors who have suffered losses due to the misconduct of their broker or investment advisor may be entitled to recover damages. It is crucial for investors to monitor their investments closely and to be aware of any red flags that may indicate potential misconduct.
Red Flags for Financial Advisor Malpractice
- Recommending investments that are inconsistent with your risk tolerance or investment objectives
- Failing to disclose material information about an investment, such as risks or fees
- Engaging in excessive trading or unauthorized transactions in your account
- Pressuring you to make investment decisions or to invest in specific products
If you suspect that your broker or investment advisor has engaged in misconduct, it is essential to seek legal guidance from experienced professionals, such as the attorneys at Haselkorn & Thibaut.
Recovering Investment Losses Through FINRA Arbitration
Investors who have suffered losses due to the misconduct of their broker or investment advisor may be able to recover damages through FINRA arbitration. This process allows investors to seek compensation for their losses in a private, out-of-court setting.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is dedicated to helping investors recover their losses. With over 50 years of combined experience and a 98% success rate, the firm has a proven track record of securing successful financial recoveries for their clients.
If you have invested in GWG L Bonds through Randy Birkinbine or Ausdal Financial Partners, Inc. and have suffered losses, Haselkorn & Thibaut offers free consultations to discuss your legal options. Contact them at their toll-free number, 1-888-885-7162 , to speak with an experienced securities arbitration attorney. The firm operates on a “No Recovery, No Fee” basis, meaning you only pay if they successfully recover your losses.
