Securities Lawyers Blog
The securities attorneys at Gana Weinstein LLP are currently investigating NEXT Financial Group, Inc. (Next Financial) broker Stephen Dellelo (Dellelo).
According to BrokerCheck records, Dellelo is subject to one pending customer complaint concerning unsuitable placements in illiquid investments.
In November 2017, a customer alleged that from 2007 to 2017, Dellelo placed the customer into private and illiquid investments that were unsuitable to the customer and resulted in losses of $900,000. This dispute is currently still pending.
Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.
Brokers who sell private investment products are paid additional commission in order to hype what sometimes turn out to be inferior quality investments. Due to the high commissions brokers earn on these products, they sell them to investors who cannot profit from them. Abuse of these products has become so common place among brokers that many states limit investors from investing more than 10% of their liquid assets in certain types of illiquid investments such as Non-Traded REITs. Many states impose these limitations because its understood that that they provide virtually no benefit to investors in relationship to their risks.
Dellelo entered the securities industry in 1991 and has been registered with Next Financial since 2005. From 2002 to 2005, he was registered with Investors Capital Corp. From 1992 to 2002, he was registered with New England Securities. From 1991 to 1992, he was registered with NYLife Securities Inc.
Gana Weinstein LLP’s investment fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts due to claims of unsuitability and misrepresentation. 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.