Securities Lawyers Blog
The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that financial advisor Raul Benitez (Benitez), formerly employed by Wells Fargo Clearing Services , LLC (Wells Fargo) has been subject to at least six customer complaints and one termination for cause during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Benitez’s customer complaints alleges that Benitez recommended unsuitable investments in various investments and makes allegations including common law fraud, gross negligence.
In January 2024 a customer complained that Benitez violated the securities laws by alleging that Benitez made unsuitable investments and misrepresentations of recommendations in September 2014 and March 2015. The claim alleges $500,000 in damages and is currently pending.
In November 2023 a customer complained that Benitez violated the securities laws by alleging that Benitez made an investment recommendation that was unsuitable. The claim alleges $500,000 in damages and is currently pending.
In July 2021 a customer complained that Benitez violated the securities laws by alleging that Benitez made an investment recommendation in NorthStar that was unsuitable. The claim alleged $2178,707 in damages and settled for $175,000.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a “best interest” standard for broker-dealers and associated persons. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions. Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Finally, the advisor must use their knowledge of the first two elements to consider reasonably available investment option alternatives and come to the conclusion that there is a reasonable basis to believe that the recommendation or advice being provided is in the retail investor’s best interest.
An advisor must understand the type of account, securities, and their client in order to meet their care obligations. The type of securities account has the potential to greatly affect retail customers’ costs and investment returns. Different types of securities accounts can offer different features, products, or services, and not all types of accounts or services would be in every investor’s best interest.
According to newsources, a study revealed that 7.3% of financial advisors had a customer complaint on their record when records from 2005 to 2015 were examined. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and criminal cases.
Benitez entered the securities industry in 2001. From June 2013 through October 2014 Benitez was associated with LPL Financial LLC. From September 2014 through October 2018 Benitez was associated with SunTrust Investment Services, Inc. Finally, from Setpember 2018 through June 0f 2023 Benitez was associated with Wells Fargo out of the firm’s Aventura, Florida office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.