Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Angelo Piccone (Piccone), previously associated with IBN Financial Services, Inc., has at least one disclosable event. These events include one tax lien, alleging that Piccone recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on January 29, 2025.
Without admitting or denying the findings, Piccone consented to the sanctions and to the entry of findings that he willfully violated Reg BI by recommending 11 sales of speculative, illiquid alternative investments totaling $457,000 to a retail customer. The finding stated that the customer had a moderate risk tolerance, an annual income of no more than $25,000, and a net worth, not including primary residence, of $587,438. The customer’s investment objectives were preservation of capital, current income, and funding retirement, and they did not include speculation. Piccone earned $23,905.81 in commission in connection with his recommendations of these alternative investments to the customer. As a result of Piccone’s recommendations, the customer became 77% concentrated in alternative investments, including a 15% concentration in speculative bonds. Piccone’s recommendations were not in the customer’s best interest based on her investment profile, including her moderate risk tolerance. The findings also stated that Piccone used his personal mobile device to exchange text messages with the customer to conduct securities business. In one of those communications, Piccone made an unbalanced, promissory and misleading statement to the customer regarding the prospects for recovery related to one of her investments. Because Piccone used an unapproved channel for business-related communications, the firm was unable to preserve those communications as required.
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 Reg BI standard of care applies to registered representatives making recommendations to customers in the purchase, sale, or exchange of securities or the implementation of investment strategies involving securities and non-securities. The rule also applies to the handling of opening accounts such as account transfers and types of accounts being recommended to be opened. 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.
Piccone has been in the securities industry for more than 38 years. Piccone has been registered as a Broker with IBN Financial Services, Inc. since 2011.
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.
