Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Raymond Dimuro (Dimuro), previously associated with Charles Schwab & Co., Inc., has at least one disclosable event. These events include one tax lien, alleging that Dimuro recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on October 24, 2024.
The Securities and Exchange Commission deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Raymond J. DiMuro (‘DiMuro’ 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 commission finds that on October 4, 2024, a final judgment was entered by consent against Respondent, permanently enjoining him from future violations of Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and 10b-5(c) thereunder, and Sections 206(1) and 206(2) of the Advisers Act, as set forth in the judgment entered in the civil action entitled Securities and Exchange Commission v. Raymond J. DiMuro, Civil Action Number CV-24-02477-PHX-DJH, in the United States District Court for the District of Arizona. The Commission’s complaint alleged that from at least January 2018 to January 2022, Respondent engaged in a cherry-picking scheme by using Your Source’s block trading account to disproportionately allocate profitable stock and option trades to three favored clients and unprofitable trades to his other clients, which resulted in the favored clients receiving $1,007,248 in excess profits as compared to Respondent’s other clients. According to the complaint, there was less than a one-in-a-million probability that the favored clients’ and the other clients’ disparate investment returns was due to chance.
In the financial industry advisors must meet the requirements of the SEC’s Regulation Best Interest (Reg BI) in providing investment advice and services. Reg BI established a ‘best interest’ standard for brokerage firms and registered representatives. Reg BI applies when brokers recommend a retail investor engage in securities transaction or an investment strategy involving one or more securities. Reg BI also applies to financial advice concerning the transfer of funds and opening 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 different sub-parts of the Reg BI rule that financial professionals must comply with when providing advice. Among those is the duty of care obligation that mandates associated persons to evaluate investment options, review and be knowledgeable the risks and rewards of the investment or service, compare alternative investment products, and ensure that the overall investment strategy aligns with the client’s goals and is in their best interests.Another aspect of the care obligation is focusing on the client’s specific needs which brokers must reasonable understand through obtaining information for the client’s investment profile. In completing a customer’s investment profile the advisor should include information such as the investor’s investment time horizon; liquidity needs; risk tolerance; experience with various investment vehicles; investment objectives and financial goals; assets and debts including outside investment accounts; marital status; tax information; age; and other relevant information that may be individual to the investor that the advisor would need to know to properly render advice or provide services. Using the foregoing information, the associated person then must consider reasonably available investment option to accomplish the investor’s goals as well as alternative investment options that may be cheaper or other important qualities. Finally, the advisor must conclude that there is a reasonable basis to believe that the recommendation being provided is in the 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.
Dimuro has been in the securities industry for more than 3 years. Dimuro has been registered as a Broker with Charles Schwab & Co., Inc. 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.
