Securities Lawyers Blog
The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Scott Palmer (Palmer). According to BrokerCheck records, Palmer is subject to at least five customer complaints. The customer complaints against Palmer allege securities law violations that claim unsuitable investments, excessive options trading, and unauthorized investments among other claims.
The most recent complaint was filed in July 2016, and alleged $125,000 in damages due to claims that the broker made unsuitable investments in clients account while employed at Janney Montgomery Scott LLC. The complaint was settled for $75,000.
In January 2015, another customer brought a complaint against Palmer alleging that investments in the customer’s account were unsuitable based on clients’ investment objectives causing alleged damages of $226,877. The complaint was settled for $70,000.
Brokers in the financial industry have the fundamental responsibility to treat investors fairly. This obligation includes making only suitable investments for their client. The suitable analysis has certain requirements that must be met before the recommendation is made. First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives. These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.
Palmer entered the securities industry in 1973. From June 1994 through February 2007, Palmer was registered with Citigroup Global Markets Inc. Since March 2007, Palmer has been associated with Janney Montgomery Scott LLC out of the firms Hackensack, New Jersey office location.
The number of events listed on Palmer brokercheck is high relative to her peers. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints. In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters. However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck. More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.
Gana Weinstein LLP’s securities fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts due to claims of fraud and negligence. 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.