Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Rocio Tapia (Tapia), currently associated with Northwestern Mutual Investment Services, LLC, has at least one disclosable event. These events include one tax lien, alleging that Tapia recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on September 16, 2024.
Without admitting or denying the findings, Tapia consented to the sanctions and to the entry of findings that she solicited and received exam content before taking the Certified Financial Planner (CFP) exam in violation of the CFP Board testing rules. The findings stated that as part of the registration process to take the CFP exam Tapia agreed to abide by the CFP’s Pathway Agreement, which prohibited exam misconduct before. During, and after exam administration. The Pathway Agreement prohibited, among other things, communicating with any other person about the exam during the exam administration period, and attempting to give or receive any assistance related to the exam. On three occasions prior to taking the exam, Tapia solicited and received information regarding exam content from individuals on a group messaging platform who had already taken the exam earlier. The CFP Board’s Disciplinary and Ethics Commission (DEC) found that Tapia’s actions constituted exam misconduct in violation of the Pathway Agreement. The DEC imposed a three-year bar on Tapia from applying for or obtaining the CFP certification and voided her exam results. Later that year. The Appeals Commission of the CFP Board upheld the DEC’s findings and affirmed the sanctions.
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 financial advisor must use their knowledge of both their reasonable diligence into investment options as well as their knowledge of the investor’s client specific needs to consider reasonably available investment options. Those investment options must allow the broker to determine that there is a reasonable basis that the recommendation is in the retail investor’s best interest.
In addition to specific investments being recommended, under Reg BI, a broker must also understand the type of account that their client would need in order to meet their care obligations. The SEC has stated that the type of securities account an investor has can greatly affect a customers’ costs and overall investment returns. Further, different account types can offer and support different features, products, securities, or services, and account type would not be appropriately applied in a one size fits all manner.
Tapia entered the securities industry in 2009. Tapia has been registered as a Broker with Northwestern Mutual Investment Services, LLC since 2009.
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.
