Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Peter Decaprio (Decaprio), previously associated with Thomas Weisel Partners LLC, has at least one disclosable event. These events include one regulatory, alleging that Decaprio recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on August 30, 2024.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Peter J. DeCaprio (‘DeCaprio’ or ‘Respondent’). In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement which the Commission has determined to accept. The Commissions finds that it’s complaint alleged that during the period from about July 2020 through late 2023, FlowPoint and DeCaprio misrepresented to investors that the Funds were audited annually by an independent auditor. While FlowPoint and DeCaprio engaged an auditor to audit two of the four Funds, that auditor did not produce any audit reports, and none of the Funds were audited. FlowPoint and DeCaprio did not correct their ongoing misstatements to investors despite knowing that the Funds were not actually audited by the auditor they had engaged. FlowPoint and DeCaprio breached their fiduciary duty to two of the Funds they advised by failing to obtain annual audits for those two Funds, as those Funds’ organizational documents (a limited partnership agreement and limited liability company agreement) required. FlowPoint and DeCaprio were investment advisers to the Funds. By failing to operate those Funds as they were required to be operated, they failed in their duty as investment advisers to those Funds and operated a fraud on the Funds and their investors. They also defrauded investors in the Funds by making material misstatements about audits of the Funds and the identify of their auditor to investors. The Commission’s complaint also alleged that between July 2020 until September 2023 FlowPoint failed to maintain or enforce written policies and procedures regarding the misuse of material nonpublic information and that DeCaprio aided and abetted this violation.
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.
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.
Decaprio has been in the securities industry for more than 9 years. Decaprio has been registered as a Broker with Thomas Weisel Partners LLC since 1999.
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.
