According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Terry Bailey (Bailey), previously associated with LPL Financial LLC, has at least one disclosable event. These events include one customer complaint, alleging that Bailey 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 $200,000.00 on December 17, 2024.
Customer indicates that advisor forged customer signatures on annuity purchase paperwork.
Brokers must, under securities laws, act in their clients’ best interests and recommend only suitable investments. The SEC has also implemented “Regulation Best Interest (Reg BI)“, which strengthens the brokerdealer standard of conduct beyond existing suitability obligations, making it mandatory for brokerdealers to act in a retail customer’s best interest when recommending 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 must first collect and evaluate sufficient information about a retail investor to reasonably believe that their account recommendations serve the investor’s best interests. Recommendations cannot be based on materially inaccurate or incomplete information. Every recommendation’s cost and investor details are always part of material information. 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, a brokerage firm should not depend solely on information from the issuer regarding a company, but must perform its own thorough investigation.
Another protective measure for investors is the requirement for brokers to disclose. 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 research shows past regulatory and customer complaint issues can indicate future problems for brokers. The Office of the Chief Economist (OCE) at FINRA released a study demonstrating that past disciplinary and disclosure events can be used to anticipate future ones. 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.
Bailey has been in the securities industry for more than 14 years. Bailey has been registered as a Broker with LPL Financial LLC since 2016.
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.