Chicago-based Stoltmann Law Offices is representing investors who’ve suffered losses because their financial advisor recommended “private securities” without the permission or knowledge of their firms. It’s not unusual for financial advisors to pitch certain stocks that don’t have to follow the strict disclosure rules laid down by the Securities and Exchange Commission (SEC) and FINRA, the regulator of the US securities industry. But these “private” securities still need to be fully reviewed by brokerage firms to protect investors from excessive risk that they don’t want to take. There are multiple industry rules that dictate that brokers know their clients’ risk profiles.
FINRA suspended and fined former Ameriprise broker Jonathan M. Turner for allegedly selling securities in an un-named private company that involved two customers and transactions totaling $200,000. “Turner allegedly directed the customers to Company X and recommend that they invest in its securities, for which he provided certain forms,” FINRA says. Turner allegedly didn’t earn any commissions from the transactions, according to financialadvisoriq.com, “but participated in them without notifying Ameriprise in writing, against FINRA rules.” Whether the advisor was paid a commission on the transaction is totally irrelevant.
In January 2020, the FINRA complaint adds, “Turner allegedly incorrectly certified to Ameriprise that he had not engaged in any private securities transactions not authorized previously by the firm.” This is extremely common and does not take Ameriprise off the hook. For a generation, the SEC has warned brokerage firms like Ameriprise that they cannot simply take the broker’s they supervise word for it, to satisfy the firm’s supervisory obligations.
Turner became a broker in 2010, registering with Ameriprise in Hershey, Pennsylvania, according to BrokerCheck. In September 2019, Turner allegedly took a position as chief investment officer at a firm identified only as “Company X, a credit card processing service,” according to the FINRA complaint. In his role with the un-named firm, Turner was “allegedly responsible for setting up new investment vehicles as well as raising capital from investors, among other duties,” FINRA says. So, although he didn’t literally take a commission, he solicited clients to invest in a private company for which he was the Chief Investment Officer – surely to his personal benefit.
According to FINRA, Turner’s registration with Ameriprise ended in April, 2020. In his termination notice filed that month, the company said that it was a voluntary firing. The following month, though, Turner joined Sequentis Capital Advisors, according to the SEC’s Investment Advisor Public Disclosure database. Turner’s registration there ended the following September, and he has not registered with another firm, according to his record. Turner agreed to a three-month suspension and to pay a $5,000 fine without admitting or denying the findings, according to the FINRA letter of acceptance.
Firms like Ameriprise are legally required by FINRA to monitor what their brokers are selling – their investments must be vetted and authorized by the firms – and have an obligation to investors to fully reveal true risk and return information about the investments sold. Broker-dealers and advisors are also required to fully vet all of the investments they are selling to determine if they are suitable for your age and risk tolerance. Investors can file FINRA arbitration complaints if these rules are broken. You can often avoid rogue broker-advisors by checking their backgrounds through BrokerCheck,
If you invested with a financial advisor and lost money as a result, you may have a claim to pursue through FINRA Arbitration. Please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no obligation consultation with a securities attorney. Stoltmann Law Offices is a contingency fee law firm which means we do not get paid until you do!