Securities Lawyers Blog
The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker William Baumner (Baumner). According to BrokerCheck records Baumner has been subject to at least seven customer complaints and five judgements or liens. The customer complaints against Baumner allege securities law violations that including unsuitable investments, breach of fiduciary duty, and misrepresentations among other claims. According to the disclosures, many of the complaints involve private companies, private placements, penny stocks, and one complaint mentions a recommendation for CTX Virtual.
In December 2015 a customer filed a complaint alleging $100,000 in damage stemming from misrepresentations for a stock between February 2014 and January 2016. The complaint has been denied. Baumner has disclosed several large tax liens including a $5,825 lien in January 2015. Substantial judgements and liens on a broker’s record can reveal a financial incentive for the broker to recommend high commission products or services. A broker’s inability to handle their personal finances has also been found to be relevant in helping investors determine if they should allow the broker to handle their finances.
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.