Securities Lawyers Blog
The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Brian Zimmerman (Zimmerman). According to BrokerCheck records there are at least 5 customer complaints that have been filed against Zimmerman. The customer complaints against Zimmerman allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, failure to supervise, and churning (excessive trading) among other claims. The most recent customer complaint against Zimmerman filed in July 2014 alleges that Zimmerman breached his fiduciary duty, negligence, and misrepresentations in the handling of the customer’s account leading to $128,405 in damages. The claim is currently 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.
The number of customer complaints against Zimmerman is high relative to his peers. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints. In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters. However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck. More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.