According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Devon Freeman (Freeman), previously associated with Northwestern Mutual Investment Services, LLC, has at least one disclosable event. These events include one tax lien, alleging that Freeman recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on January 28, 2025.
Without admitting or denying the findings, Freeman consented to the sanctions and to the entry of findings that he forged and backdated variable insurance applications and other documents. The findings stated that Freeman forged one customer’s signature on a document cancelling a life insurance policy and forged an additional customer’s signature nine times on a life insurance application. In addition, Freeman forged a third customer’s signature on three documents relating to variable insurance policies. Furthermore, Freeman forged a fourth customer’s signature eight times on a variable insurance application. Freeman also backdated this document to create the misimpression that the customer had applied for the insurance policy at a time when they were at an age that qualified them to obtain the policy at a lower cost. None of the customers authorized him to sign the documents on their behalf or were aware that he had engaged in these forgeries or the above-referenced backdating. After the firm informed the customers of Freeman’s conduct, three of the customers decided to remain invested in their fixed and variable life insurance policies and one customer declined to remain invested and received a refund of her premiums. Through this conduct, Freeman caused his member firm to maintain inaccurate records. The findings also stated that Freeman exchanged text messages with customers about securities business using his personal cell phone, which was an unapproved channel. Freeman did so without his firm’s knowledge or permission, and he did not send a copy of these communications to Northwestern. As a result, Freeman caused his firm to maintain incomplete records.
Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated ‘Regulation Best Interest (Reg BI)‘ which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.
Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. Data on the investor and the expense of the advice are consistently part of material information. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.
In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. Accordingly, a brokerage firm may not rely blindly upon the issuer for information concerning a company in lieu of conducting its own reasonable investigation.
Another protective measure is to require broker discloses. Brokers are required to report events to FINRA, such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters, as shown on their BrokerCheck reports. FINRA has recognized that recent research shows past regulatory and customer complaint issues can indicate future problems for brokers. FINRA’s Office of the Chief Economist (OCE) published a study showing the predictability of disciplinary and disclosure events based on past similar events. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.
Freeman has been in the securities industry for more than 7 years. Freeman has been registered as a Broker with Northwestern Mutual Investment Services, LLC since 2015.
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.