In March 2017, the New Jersey Bureau of Securities sanctioned Baum after he allegedly failed to comply with the terms of a supervisory agreement. He was ordered to cease and desist and to pay a fine of $6,000.
In August 2009, the Financial Industry Regulatory Authority (FINRA) sanctioned Baum following allegations he executed discretionary trades without written authorization in the account of a deceased customer and executed discretionary trades in other accounts without authorization. He was issued a 30-day suspension and a fine of $15,000.
In January 2007, a customer alleged Baum made investments that were not consistent with the risk tolerance and objectives. This complaint settled for $24,500.
In September 2006, a customer alleged Baum mismanaged the account. This complaint settled for $73,750.
In April 2006, a customer alleged unsuitable investments and failure to follow instructions with respect to investment objections. This complaint settled for $57,500.
In March 2006, a customer alleged Baum made unsuitable recommendations and mismanaged the account. The complaint settled for $108,500.
In February 2006, a customer alleged Baum recommended unsuitable products and failed in his supervisory duties. The complaint settled for $210,000.
All advisers have a fundamental responsibility to deal fairly with investors, including making suitable investment recommendations. There are three primary brokerage responsibilities outlined by the suitability rule:
- To perform reasonable-basis suitability analysis
- The adviser must investigate the investment properties (benefits, risks, tax consequences, and other relevant factors) in order to have a reasonable basis when making recommendations of products or securities suitable to his or her clients.
- To perform customer-specific suitability analysis
- The broker must understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.
- To perform quantitative suitability analysis
- All brokers and broker-dealers must have a reasonable basis for recommending a series of transactions, even if suitable when viewed in isolation, are not excessive and unsuitable for the customer when taken together in light of the customer’s objectives.
Baum has been in the securities industry for 31 years and has been employed with Janney Montgomery Scott LLC since May 2016. Baum started his career with E.F. Hutton & Company Inc. in 1986 and stayed there until 1988. In 1988, he moved to Lehman Brothers Inc. where he stayed until 1993. Baum was associated with Citigroup Global Markets Inc. from 1993 until 2006. From 2006 until 2016, he was associated with BPU Investment Management Inc.
Investors who have suffered investment losses due to unsuitable investment activity by brokers may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors concerning securities violations in various products including private placement securities. Our consultations are free of charge and the firm is only compensated if you recover.