Brian Brown

According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Brian Brown (Brown), previously associated with X-change Financial Access, LLC, has at least one disclosable event. These events include one tax lien, alleging that Brown recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.

FINRA BrokerCheck shows a final customer complaint on December 23, 2024.

Brian Brown violated Cboe Rule 5.91 – Floor Broker Responsibilities in that Brown, acting as a Floor Broker on behalf of XCHG, failed to use due diligence to ensure he was executing the portion of the orders for Firm A as contra at the best price or prices available and in accordance with the Rules. Additionally, Brown executed orders over which he had discretion as to the choice of the specific SPX options series to be bought or sold; the number of contracts to be bought or sold; and whether such transaction was a buy or sell transaction. Brown also violated Cboe Rules 5.80(b) – Admission to and Conduct on the Trading Floor and 8.1 – Just and Equitable Principles of Trade by Brown in that by and through the Arrangement and/or the creation and execution of orders pursuant to this Arrangement, Brown: 1) engaged in conduct inconsistent with the maintenance of a fair and orderly market, apt to impair public confidence in the operation of the Exchange, and inconsistent with the ordinary and efficient conduct of business; 2) May have prevented in-crowd market participants the opportunity to participate in and/or participate fully in the contra sides of orders to which they had priority over Firm A and enabled Firm A to receive fills as a contra party to orders to which Firm A had no priority; and 3) circumvented ordinary standards of care related to order handling, open outcry trading, and Floor Broker duties and responsibilities as set out in Exchange Rules.

A recent article by Bloomberg highlighted a disturbing trend whereby brokers of independent brokerage firms have been able to make substantial profits while providing allegedly unsuitable investment advice and potentially tanking the retirement savings of potentially hundreds and maybe thousands of blue collar workers. These brokerage firms have been able to tap into large corporations with thousands of employees with 401(k) plans and convince them to rollover their accounts to their firm into IRAs. Once there, the brokers recommend unsuitable investments in an already tax-deffered account such as municipal bond funds and variable annuities. Some of the investments are extremely speculative and carry huge commissions and fees. In the end the brokers make hundreds of thousands in commissions while the investor is left with a depleted retirement account.

How the practice works is that brokers form connections with large employers in order to pitch their investment services to employees. Because the employer allows the broker to use their offices and facilities to pitch their investment services, employees often mistakenly believe that the company endorses or has otherwise evaluated the broker. In fact, these companies often have little to no relationship with the broker or a defined screening process.

According to Bloomberg, employees shifted $321 billion from 401(k)-style plans to individual retirement accounts in 2012. As a result, IRAs account assets are up to $6.5 trillion, more than the $5.9 trillion contained in 401(k)-style accounts. However, the shifts have been used by some Wall Street firms to profit at their client’s expense. IRAs often charge higher fees than 401(k) plans which provides brokers an incentive to promote rollovers.

Articles Tagged with Brian Brown

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