Thomas Barbaccia, a broker and investment advisor associated with Securities America, Inc., is currently facing a customer dispute allegation regarding an unsuitable REIT investment recommendation made in 2014. The claimant alleges that Barbaccia recommended an inappropriate real estate security, resulting in financial losses. As of January 23, 2024, the dispute remains pending, with no resolution reached.
According to Barbaccia’s BrokerCheck report, he has been registered with Securities America, Inc. (CRD #10205) in the state of New York since June 14, 2022. The firm, headquartered in La Vista, Nebraska, is a registered broker-dealer and investment advisor with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
In response to the allegation, Barbaccia maintains that the claim is invalid, stating that the client is being untruthful. He asserts that he had multiple conversations with the client following the REIT’s initial price drop due to panic selling, advising the client to hold the position to allow for potential loss recovery. Barbaccia claims that over the following two weeks, the price increased significantly, approaching the client’s cost basis. He contends that he called the client to discuss selling the position, given the substantial recovery of losses, but the client instructed him to keep the investment, believing it would continue to rise in value.
Understanding REITs and FINRA rules
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Real estate investment trusts (REITs) are companies that own, operate, or finance income-generating real estate properties. REITs allow individual investors to invest in large-scale, diversified real estate portfolios without directly owning or managing the properties themselves. While REITs can offer attractive returns and portfolio diversification, they also carry inherent risks, such as market volatility, interest rate fluctuations, and property-specific issues.
FINRA, the self-regulatory organization overseeing broker-dealers and their registered representatives, has established rules and guidelines to protect investors and maintain market integrity. One such rule, FINRA Rule 2111, known as the “Suitability Rule,” requires brokers to have a reasonable basis for believing that a recommended investment 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, risk tolerance, and investment experience.
Importance of suitability for investors
The suitability of investment recommendations is crucial for investors, as it helps ensure that their financial goals and risk tolerance are aligned with the investments they hold. When a broker recommends an unsuitable investment, it can expose the investor to undue risk and potential financial losses. According to a recent study by Bloomberg, investment fraud and bad advice from financial advisors have cost investors billions of dollars in recent years.
In the case of Thomas Barbaccia and the alleged unsuitable REIT recommendation, the outcome of the pending dispute could have significant implications for the parties involved. If the allegation is substantiated, it may result in disciplinary action against Barbaccia and potential financial compensation for the claimant.
Investors who believe they have been the victim of unsuitable investment recommendations or other forms of broker misconduct may have legal recourse to recover their losses. It is essential for investors to carefully review their investment portfolios, monitor their accounts for irregularities, and seek the advice of experienced legal professionals if they suspect wrongdoing, such as the investment fraud lawyers at Haselkorn & Thibaut.
Red flags and seeking legal assistance
Investors should be aware of potential red flags that may indicate financial advisor malpractice or misconduct. These warning signs include:
- Unsuitable investment recommendations that do not align with the investor’s risk tolerance or financial goals
- Lack of transparency or inadequate disclosure regarding investment risks and fees
- Unauthorized trading or excessive trading activity in the investor’s account
- Inconsistent or misleading communication from the advisor
- Significant and unexplained investment losses
If an investor suspects they have been the victim of financial advisor malpractice, it is crucial to consult with a knowledgeable investment fraud attorney. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the allegations against Thomas Barbaccia and Securities America, Inc.
With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses through FINRA arbitration. The firm operates on a contingency fee basis, meaning clients pay no fees unless a recovery is secured.
Investors who have suffered losses due to the alleged misconduct of Thomas Barbaccia or any other financial advisor are encouraged to contact Haselkorn & Thibaut for a free consultation by calling their toll-free number at 1-888-885-7162 .
