Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Barry Schwartz (Schwartz), currently associated with UBS Financial Services Inc. (UBS), has been subject to at least two customer complaints and one regulatory action during his career. The most recent complaint against Schwartz alleged that Schwartz recommended unsuitable investments in various equity and alternative investments among other allegations of misconduct relating to the handling of their accounts.
In December 2023 a customer complained that Schwartz, from January 2021 to February 2022, engaged in unsuitability and overconcentration of certain investments, and that such investments resulted in principal losses. The investor also alleges misrepresentation with respect to the handling of Claimants’ investment accounts and violated the securities laws claiming $1 million in damages. The claim is currently pending.
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 brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of 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.