The seriousness of allegations against financial advisors cannot be understated, and the case of Walter Shoczolek, a broker currently associated with Sigma Financial Corporation, is no exception. The allegations against Shoczolek are grave, with a customer dispute lodged on 9/13/2023 claiming that her investment was unsuitable and that Shoczolek liquidated it without her authorization. The customer is seeking damages amounting to $500,000.
Walter Shoczolek is not an investment advisor but a broker and was associated with Avantax Investment Services, Inc. when the alleged activities occurred. Shoczolek is currently employed by Sigma Financial Corporation (CRD 14303) as of 09/20/2023. The case is currently pending with the reference number 23-02405N10NN.
The FINRA Rule and Its Explanation in Simple Terms
Table of Contents
FINRA, the Financial Industry Regulatory Authority, is a non-governmental organization that regulates member brokerage firms and exchange markets in the United States. They enforce rules that protect investors and ensure the integrity of the market.
The allegation against Shoczolek falls under the FINRA Rule 2111, which pertains to suitability. In simple terms, this rule requires that a firm or associated person have a reasonable basis to believe a recommended transaction or investment strategy involving a security or securities is suitable for the customer. This is based on the information obtained through reasonable diligence to ascertain the customer’s investment profile.
Furthermore, unauthorized trading, another allegation against Shoczolek, is a clear violation of FINRA rules. Brokers must receive express permission from the client before executing trades on their behalf.
Why This Matters to Investors
Investors entrust their hard-earned money to financial advisors and brokers, expecting them to act in their best interest. When advisors violate this trust, it can result in significant financial losses and emotional distress for the investor.
Beyond individual losses, such cases also erode trust in financial institutions and the investment industry as a whole. They underscore the importance of investor education and the need for stringent regulatory oversight of financial advisors and brokers.
Investors impacted by such malpractice can seek help through FINRA Arbitration, a dispute resolution forum that is quicker, less formal, and often less expensive than litigation.
Red Flags for Financial Advisor Malpractice and Recovery of Losses
Investors should be aware of red flags that could indicate financial advisor malpractice. These include unauthorized trades, unsuitable investments, excessive trading to generate commissions (churning), and failure to diversify investments.
Victims of such malpractice can recover their losses through legal avenues. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the activities of Walter Shoczolek and Avantax Investment Services, Inc.
With over 50 years of experience and an impressive 98% success rate, Haselkorn & Thibaut has successfully recovered millions in financial losses for investors. They offer a free consultation to clients and operate on a “No Recovery, No Fee” policy. To seek their assistance, you can call their toll-free consultation number at 1-800-856-3352.
Investors should remember that the seriousness of allegations like these should not be underestimated. It is crucial to stay vigilant, understand your rights, and seek professional help when things go wrong.
