Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Robert Starnes (Starnes), previously associated with Sa Stone Wealth Management INC., has at least 3 disclosable events. These events include 2 customer complaints, one regulatory event, alleging that Starnes recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $3,000,000.00 on November 13, 2024.
Respondent is vicariously liable to Claimants for the losses each has suffered because of Mr. Robert Starnes’ alleged fraud and misconduct.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $35,000.00 on August 31, 2023.
Customer alleged in a complaint filed with SEC that she invested $30,000.00 in September 2021 and another $5,000.00 in August 2022 with the representative. She states the investments were made by writing a check payable to the representative. She states she requested her investments be liquidated in April 2023 and expected the funds no later than May 30 but still does not have the funds. Per her complaint, neither company listed on her statements provided by the representative have a record of an account for her or of the investment he claimed to have purchased with her funds.
FINRA BrokerCheck shows a final customer complaint on July 27, 2023.
Without admitting or denying the findings, Starnes consented to the sanction and to the entry of findings that he refused to appear for on-the-record testimony requested by FINRA in connection with this matter, which originated from a customer complaint made to FINRA. The findings stated that at Starnes’ request, FINRA adjourned the on-the-record testimony for him to consider whether to retain counsel. FINRA sent another request to Starnes to appear for on-the-record testimony on another date. Starnes acknowledges that he received FINRA’s request and will not appear for on-the-record testimony at any time.
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 a registered representative is providing investment advice through making recommendations customers and covers securities transaction, investment strategies, and recommendations concerning advice on opening of an account or 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. 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.
Starnes has been in the securities industry for more than 36 years. Starnes has been registered as a Broker with Sa Stone Wealth Management INC. since 2019.
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.
