Securities Lawyers Blog
The investment fraud lawyers of Gana Weinstein LLP are examining multiple customer disputes filed with the Financial Industry Regulatory Authority (FINRA) against broker Scott Goldman (Goldman). Goldman’s FINRA BrokerCheck record shows several disclosures mainly pertaining to unsuitable investments.
In December 2016, an elderly customer alleged that during Goldman’s employment at LPL Financial Corporation, he recommended highly unsuitable investments that were heavily concentrated in risky, leveraged precious metal products. In addition, the broker did not properly inform his client of the risks associated with such an investment. This dispute was settled in December 2016, and resulted in $10,000 penalty and Goldman was suspended from the industry.
Another case against Goldman was filed in October 2014 for allegedly making unsuitable recommendations, failing to supervise, and breaching his fiduciary duty during his employment at H. Beck Inc. The alleged damages were worth $250,000. The case was settled in November 2015 for $75,000.
In December 2012, while employed at LPL Financial and H. Beck Inc, Goldman allegedly recommending unsuitable investment products for his client during the period of November 2009 to November 2011. The alleged damages of $200,000 were settled for the amount of $114,000 in October 2014.
Scott Goldman entered in the industry in 1987. He is currently employed at Cambridge Investment Research Inc. He was at H. Beck Inc. from January 2010 to May 2016. He was previously employed at LPL Financial Corporation (September 2009 – December 2009), Waterstone Financial Group, Inc, (December 2002 – September 2009), and FFP Securities, Inc. (January 1992 – December 2002).
All advisers have a fundamental responsibility to deal fairly with investors, including making suitable investment recommendations. There are three primary brokerage responsibilities outlined by the suitability rule:
• To perform reasonable-basis suitability analysis
The adviser must investigate the investment properties (benefits, risks, tax consequences, and other relevant factors) in order to have a reasonable basis when making recommendations of products or securities suitable to his or her clients.
• To perform customer-specific suitability analysis
The broker must understand the customer’s specific investment objectives to determine whether or not the specific product or security being recommended is appropriate for the customer based upon their needs.
• To perform quantitative suitability analysis
All brokers and broker-dealers must have a reasonable basis for recommending a series of transactions, even if suitable when viewed in isolation, are not excessive and unsuitable for the customer when taken together in light of the customer’s objectives.
The dedicated attorneys at Gana Weinstein LLP represent investors who have suffered losses due to unsuitable investments. The majority of these claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.