Shaun Floresca, a broker and investment advisor associated with LPL Financial LLC (CRD 6413) since November 12, 2012, is facing a pending customer dispute filed on January 2, 2024. The customer alleges that an investment made in 2014, involving a real estate security, was inappropriate for their investment objectives and risk tolerance. Floresca, who holds the CRD number 4758697, denies any wrongdoing and asserts that the customer’s allegations are completely without merit.
According to Floresca, the features, benefits, and all risks of the recommended investments were fully discussed with and acknowledged by the client prior to purchase. The client also received, read, and acknowledged suitability and understanding of the features, benefits, and all risks of the recommended investments by signing applicable disclosure forms, which detailed the potential for liquidity restrictions and the potential for investment losses. Although not personally named in this matter, Floresca intends to assist LPL Financial in defending against these allegations, which he characterizes as false.
Understanding the allegations and FINRA rules
Table of Contents
The customer’s complaint revolves around the suitability of the investment recommendation made by Shaun Floresca in 2014. FINRA Rule 2111, known as the “Suitability Rule,” requires that brokers and investment advisors have a reasonable basis to believe that their investment recommendations are suitable for their clients, taking into account the customer’s investment profile, risk tolerance, and financial objectives.
In this case, the customer alleges that the real estate security investment was not appropriate for their investment goals and risk appetite. If the allegations are found to be true, it could constitute a violation of FINRA’s Suitability Rule, which is designed to protect investors from being placed in investments that do not align with their financial needs and risk tolerance.
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 these scams.
The importance of suitability for investors
The concept of investment suitability is crucial for investors, as it helps ensure that the financial products and strategies recommended by their advisors are in line with their unique financial situations, goals, and risk profiles. When brokers or investment advisors fail to adhere to the Suitability Rule, investors may find themselves in investments that expose them to unnecessary risks or fail to meet their financial objectives.
Unsuitable investment recommendations can lead to significant financial losses for investors, which is why it is essential for investors to work with reputable financial professionals who prioritize their clients’ best interests and thoroughly understand their investment needs and risk tolerance.
Recognizing red flags and seeking help
Investors should be aware of potential red flags that may indicate financial advisor malpractice or unsuitable investment recommendations. These red flags can include:
- Investments that seem too complex or risky for the investor’s financial situation
- Pressure from the advisor to make quick investment decisions
- Lack of transparency regarding fees, commissions, or potential conflicts of interest
- Inconsistencies between the investor’s stated goals and the recommended investment strategy
If investors suspect that they have been the victim of financial advisor malpractice or unsuitable investment recommendations, they may be able to recover their losses through FINRA arbitration. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Shaun Floresca and LPL Financial in relation to this pending customer dispute.
With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover their losses through FINRA arbitration. The firm operates on a “No Recovery, No Fee” basis, meaning that clients only pay if the firm successfully recovers their losses. Investors who believe they may have been affected by unsuitable investment recommendations from Shaun Floresca or LPL Financial can contact Haselkorn & Thibaut for a free consultation by calling their toll-free number at 1-888-628-5590.
