Articles Tagged with Unsuitable Investment Recommendations

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from dealing with RBC brokers who have oversold energy stocks and other energy-related investments. Although these days energy stocks are among the worst investments to own – the pandemic and oil & gas glut have severely depressed demand — prior to this year brokers had been aggressively pitching petroleum-producing companies. Brokers who aggressively sold energy stocks knew how volatile the energy sector has become, yet filled investors’ portfolios with oil and gas issues. Thousands of investors have legitimate claims against their advisors for overselling unsuitable investments.

Companies that once were opening drilling operations at a breakneck pace are facing bankruptcy as the slump in the industry worsens. Investors who bought individual energy stocks, exchange-traded or mutual funds are feeling the pain.Most recently, investors filed claims against RBC brokers Joseph Ijong Chu and Christopher Lawrence Phillips, who worked at the firm’s Stamford, Connecticut, office. The brokers face investor claims of more than $2 million for reportedly selling “unsuitable investments in oil-producing and industrial metals & materials stocks leading to an over-concentration in those sectors.”

One claim against Chu alleges the broker sold $1.6 million in energy investments to a client between Sept. 18, 2018, through Jan. 20, 2020. The complaint states that the stocks not only declined in value, but were “outside their [customers’] investment objectives.” A separate, $500,000 claim against Chu, filed in July, 2020, alleged he “misrepresented the risk of allocation in energy and material sectors investments and over concentrated the Claimant’s accounts in highly volatile investments.”

Austin, Texas-based Purshe Kaplan Sterling broker Daniel Davila has been involved in resolved or pending complaints, according to the Financial Industry Regulatory Authority (FINRA). Davila allegedly recommended unsuitable investments in non-traded real estate investment trusts (REITs) and private placements, breached contract, committed fraud, breached fiduciary duty, engaged in conspiracy, employed deceptive trade practices and acted negligently. These are all against securities laws and internal firm rules. A brokerage firm has a reasonable duty to only recommend and sell those investments that are suitable for customers, by taking into account their age, net worth, investment objectives and investment sophistication. REITs and private placements tend to be highly illiquid and risky ones, and are not suitable for all investors.

FINRA public records indicate that Daniel Davila was previously registered with H.D. Vest Investment Securities in Irving, Texas from July 1987 until January 2001, National Planning Corp in Austin from January 2001 until October 2009, and Triad Advisors in Austin from October 2009 until October 2014. He is currently registered with Purshe Kaplan Sterling Investments in Austin and has been since October 2014. He has two customer disputes against him that are currently pending.

Stoltmann Law Offices is investigating Jeffrey Grayson, a registered broker with Wells Fargo Advisors in Florham Park, New Jersey. Allegedly, Grayson misrepresented and recommended an unsuitable unit investment trust (UIT), recommended an unsuitable limited partnership investment, breached fiduciary duty, acted negligently, breached contract and made unsuitable recommendations. These securities are not suitable for all investors, and a broker must take into account a customer’s net worth, age, investment objectives and investment sophistication before recommending or selling a security. If he does not, his brokerage firm, Wells Fargo, may be responsible for money losses. Please call us today for your free consultation with one of our attorneys to discuss how we might be able to help you bring a claim against Wells Fargo for Grayson’s transgressions. The call is free, so please call today. There is no obligation.

Grayson was registered with Gibraltar Securities in Florham Park, New Jersey from April 1981 until September 1999, Tucker Anthony Inc. in Boston, Massachusetts from September 1999 until March 2002, RBC Dain Rauscher in New York, New York from March 2002 until October 2002, JB Hannauer in Parsippany, New Jersey from September 2002 until October 2009 and RBC Capital Markets in Parsippany, New Jersey from October 2009 until April 2011. He is currently registered with Wells Fargo in Florham Park and has been since April 2011. He has five customer disputes against him, one of which is currently pending.

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