Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Jeremy Baldwin (Baldwin), previously associated with Brokers International Financial Services, Llc., has at least one disclosable event. These events include one tax lien, alleging that Baldwin recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on October 04, 2024.
Without admitting or denying the findings, Baldwin consented to the sanctions and to the entry of findings that he engaged in an undisclosed OBA by acting as an investment advisor for a 401(k) plan without providing prior written notice from his member firm. The findings stated that Baldwin received compensation from the 401(k) sponsor for the services he provided, including facilitating employee enrollment, and acting as an intermediary between the sponsor and the 401(k) provider and administrator. Baldwin also falsely attested that he did not have any undisclosed OBA’s on \<char_lb_r>\, annual firm questionnaires. The findings also stated that Baldwin falsified firm records when he completed annual compliance questionnaires for another representative and submitted them to the firm. Although Baldwin completed and submitted the questionnaires at the other representative’s request, the other representative did not review the questionnaires for accuracy or completeness prior to their submission creating the false impression that the other registered representative had completed the questionnaires.
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 standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. 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.
Brokerage firms and advisors must also understand the features and limitations of various account types as part of meeting Reg BI’s care obligations. Firms typically offer a variety of account options and services with different trading costs, services, such as account and activity monitoring. An advisor’s recommendation as to what type of securities account to open can alter the customers’ overall costs and investment returns. The advisor must determine that the client can benefit from the type of account being recommended to be opened and in the investor’s best interest taking into account the costs, benefits, and needs of the client.
Baldwin has been in the securities industry for more than 12 years. Baldwin has been registered as a Broker with Brokers International Financial Services, Llc. since 2017.
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.
