Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Scott Taubman (Taubman), previously associated with Ameriprise Financial Services, LLC, has at least 2 disclosable events. These events include one customer complaint, one regulatory event, alleging that Taubman recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on July 19, 2024.
Without admitting or denying the findings, Taubman consented to the sanction and to the entry of findings that he borrowed $62,500 from two senior customers, without prior notice to or written approval from his member firm. The findings stated that the terms of the loans were not documented. The customers were not immediate family members or a financial institution. Taubman firm learned of the loans and conducted an investigation, during which Taubman confirmed that he had received, in total, approximately $100,000 from the customers. Taubman did not repay the loans. When Taubman filed a Chapter 7 bankruptcy petition, he disclosed the debt as a personal loan, and he obtained a discharge of his indebtedness. The findings also stated that Taubman falsely attested in his annual compliance questionnaires that he was in compliance with his firm’s policies and procedures.
FINRA BrokerCheck shows a settled customer complaint on December 13, 2023.
Customer alleges the variable annuity recommended by the RR was unsuitable and was not in the customer’s best interest.
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. The associated person must then apply both their reasonable diligence into various investment options as well as the information gathered as to the investor’s specific needs when considering the investment recommendation. The broker must explore various alternative investment options available to address these needs and determine that there is a reasonable basis to believe that the recommendation or service being recommended is in the retail investor’s best interest.
Finally, an advisor must also analyze the specific account features offered and determine whether their client can benefit from them in order to meet their care obligations. While securities and investments come with costs that must be considered, the type of securities account also has changes the cost equation for the investor and can change the retail customers’ future investment returns. The associated person must consider the different types of securities accounts for their client and determine whether or not the cost or features are reasonably needed for the client or if the customer’s current account costs and features are superior to solutions available to the advisor. In any event, the type of account and services recommended must be in the investor’s best interest.
Taubman has been in the securities industry for more than 18 years. Taubman has been registered as a Broker with Ameriprise Financial Services, LLC since 2017.
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.
