In January 2020, Mr. Martin was the subject of a regulatory action initiated by FINRA. Mr. Martin consented to the findings and sanctions, of $5,000 in civil and administrative penalties. Mr. Martin neither admitted or denied the findings. Mr. Martin allegedly exercised discretion in customers’ accounts, without prior written authorization from the customers. Additionally, Mr. Martin received written reprimands from his firm, for engaging in such conduct.
In August 2017, a customer complained that Mr. Martin violated the securities laws by alleging that Mr. Martin engaged in unauthorized trading between February 2017 and July 2017. The claim settled in the amount of $8,252.75.
In August 2011, a customer complained that Mr. Martin violated the securities laws by alleging that Mr. Martin engaged in unsuitable investment advice, with regards to the customer’s IRA. Client claimed she deposited money into her IRA with instructions to be placed in the safest account. The IRA is alleged to have lost approximately $7,000, resulting in this customer dispute. The claim settled in the amount of $22,407.33.
Brokers are required under the securities laws to treat their clients fairly. This obligation includes the duties to disclose material risks of the investments they recommend and to present products, particularly complex or confusing products, in a fair and balanced manner that allows the client to evaluate the recommendation. Another important obligation advisors have is to make only suitable recommendations for investments to the client. There are many investments that are not appropriate for the majority of investors or for certain investors given their risk tolerance, age, and other factors. Advisors should not present these investment options to clients. There are two screens that advisors must employ to determine whether an investment is suitable for a client. First, there must be a reasonable basis for the recommendation – meaning that the product has been investigated and due diligence conducted into the investment’s features, benefits, risks, and other relevant factors. The advisor must conclude that the investment is suitable for at least some investors and some securities may be suitable for no one. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.
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. In addition, research has shown a disturbing pattern with troublesome brokers where brokers with high numbers of customer complaints are not kicked out of the industry but instead these brokers are sifted to lower quality brokerage firms with loose hiring practices and higher rates of customer complaints. These lower quality firms may average brokers with five times as many complaints as the industry average.
Mr. Martin entered the securities industry in 2002. Since October 2020, Mr. Martin has been associated with Brighton Securities out of the firm’s Santa Fe, NM 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.