In March 2017, a customer alleged unauthorized trading and unsuitability. The customer is requesting $413,045 in this pending dispute.
In July 2015, a customer alleged breach of fiduciary duty, negligence, and breach of contract. The customer is requesting $21,125,000 in this pending dispute.
Advisors are not allowed to engage in unauthorized trading. Unauthorized trading occurs when a broker sells securities without the prior consent from the investor. All brokers, who do not have discretionary authority to trade an account, are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). Further, subsequent disclosure of the trades does not cure the violation. Unauthorized trading is a type of investment fraud because the SEC has found that no disclosure could be more important and material to an investor than to be made aware that trading is taking place. Unauthorized trading is often a gateway violation to other securities violations including churning, unsuitable investments, and excessive use of margin.
Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation, the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. 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.
The number of complaints against Ferrara are unusual compared to his peers. According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015. Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters. However, studies have found that there are fraud hotspots such as certain parts of California, New York or Florida, where the rates of disclosure can reach 18% or higher. Moreover, according to the New York Times, BrokerCheck may be becoming increasing inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.
Kibrik has 7 years of securities experience and was most recently registered with Garden State Securities from 2015 to 2017. Previous registrations include Radner Research & Trading Company LLC, First Merger Capital, LLC and Seaboard Securities, Inc., which has been expelled by FINRA. Kibrik is not currently registered with any firm.
Gana Weinstein LLP’s investment fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts due to claims of unauthorized trading and unsuitability. The majority of these claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.