Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Seth Nannini (Nannini), currently associated with Capital Investment Group, Inc., has at least 4 disclosable events. These events include 4 customer complaints, alleging that Nannini 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 $100,000.00 on May 21, 2024.
GWG Holdings, Inc. filed Chapter 11 bankruptcy on April 20, 2022. Complaint alleges breach of fiduciary duty, negligence and negligent misrepresentation, breach of contract, failure to supervise, and negligence – violation of Regulation Best Interest, related to the clients’ investment in GWG L-Bonds.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $357,000.00 on March 29, 2024.
[REDACTED]: Client purchased $17,000 of GWG Holdings, Inc. L-Bonds in 2019.\, [REDACTED]: Client purchased $35,000 of GWG Holdings, Inc. L-Bonds in 2019.\, On April 20, 2022, GWG Holdings filed Chapter 11 bankruptcy. The Statement of Claim alleges violations of federal securities laws; violation of NC Securities Act; breach of contract; common law fraud; breach of fiduciary duty, and; negligence and gross negligence. The compensatory damage amount listed in the Statement of Claim was, in total, for four separate customers of the firm, of which [REDACTED] and [REDACTED] were two. The other customers were of two other representatives, not Mr. Nannini. The damage amount listed in the Statement of Claim for Ms. [REDACTED] was $17,000. The damage amount for Ms. [REDACTED] was $35,000. The damage listed for the other two customers of the other representatives was the remaining $305,000.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $50,000.00 on March 07, 2024.
Losses in GWG Holdings, Inc., which filed Chapter 11 bankruptcy on April 20, 2022. No Statement of Claim filed by the client.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $150,000.00 on July 25, 2023.
Relative to two individual purchases of GWG Holdings, Inc., with two separate registered representatives of Capital Investment Group, Inc., the clients claim violations of North Carolina Securities Act, negligence, breach of fiduciary duty, breach of contract, and respondeat superior. Mr. Nannini was the representative on a purchase of $100,000 of the security.
Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated ‘Regulation Best Interest (Reg BI)‘ which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.
Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. Material information always includes information concerning the investor as well as the cost of the recommendation. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.
In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. So, rather than depending solely on the issuer for company information, a brokerage firm should conduct its own reasonable investigation.
Additional investor safeguards include broker disclosure requirements. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters. FINRA has recognized that recent studies offer evidence showing that brokers with a past history of regulatory and customer complaint issues are more likely to have such issues in the future. FINRA’s Office of the Chief Economist (OCE) published a study showing the predictability of disciplinary and disclosure events based on past similar events. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.
Nannini entered the securities industry in 2001. Nannini has been registered as a Broker with Capital Investment Group, Inc. since 2006.
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.
