Investment fraud is a serious issue that can have devastating financial implications for investors. One such case currently under investigation involves Michael Dandrea, a broker at Sovereign Global Advisors LLC. This article will delve into the details of the allegation, the relevance of the Financial Industry Regulatory Authority (FINRA) rule, why it matters to investors, and how they can recover their losses.
Allegation’s Seriousness and Case Information
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The allegation against Michael Dandrea and Sovereign Global Advisors LLC is one of grave concern. The customer dispute, which is still pending as of September 19, 2023, claims breach of contract, breach of fiduciary duty, churning, fraud, negligence, unauthorized and unsuitable trading. The alleged misconduct has led to a claimed loss of $100,000.
Dandrea has been associated with Sovereign Global Advisors LLC (CRD 167663) since March 21, 2016, serving as a broker and investment advisor. The complaint does not list the products involved in the alleged malpractice.
Explanation in Simple Terms and the FINRA Rule
In simple terms, the allegations against Michael Dandrea and Sovereign Global Advisors LLC involve a breach of contract and fiduciary duty, fraudulent activities, and negligence. Churning refers to the excessive buying and selling of securities in a customer’s account by a broker, for the purpose of generating commissions. Unauthorized trading involves the purchase or sale of securities without the investor’s prior approval, while unsuitable trading refers to recommendations or trades that are inconsistent with the investor’s financial goals and risk tolerance.
These allegations, if proven, would constitute a violation of the FINRA Rule 5919, which prohibits brokers from making unsuitable recommendations and engaging in unauthorized trading, among other things. The rule is designed to protect investors and maintain the integrity of the market.
Why It Matters for Investors
Allegations of this nature are of utmost concern to investors. A breach of fiduciary duty, churning, fraud, negligence, and unauthorized and unsuitable trading can lead to significant financial losses. Investors rely on their advisors to act in their best interest, and when this trust is broken, it can be devastating.
Moreover, such allegations can undermine investor confidence in the financial market. It is therefore crucial that these allegations are thoroughly investigated and, if proven, the responsible parties held accountable.
Red Flags for Financial Advisor Malpractice and How Investors Can Recover Losses
Investors should be aware of certain red flags that may indicate financial advisor malpractice. These include frequent and unnecessary trades, unauthorized transactions, and investments that do not align with the investor’s financial goals or risk tolerance. If any of these red flags are present, it may be time to seek legal advice.
Investors who have suffered losses due to alleged malpractice can recover their losses through FINRA Arbitration. This is a dispute resolution process that is quicker and less formal than court litigation. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the case against Michael Dandrea and Sovereign Global Advisors LLC. With over 50 years of experience and a 98% success rate, the firm offers free consultations and operates on a “No Recovery, No Fee” policy. Investors can reach them at their toll-free consultation number, 1-800-856-3352.
In conclusion, allegations of investment fraud are serious and can have far-reaching implications for investors. It is essential that investors are vigilant and seek legal advice if they suspect malpractice. Haselkorn & Thibaut is committed to helping investors recover their losses and maintain confidence in the financial market.
