Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial advisor Eduardo Da Cruz (Da Cruz) has at least one disclosable event. This event is a customer complaint alleging that Da Cruz engaged in some form of investment related misconduct in the handling of the client’s accounts. Da Cruz is currently employed by EFG Capital International (EFG). Da Cruz’s customer complaints alleges that Da Cruz recommended unsuitable investments in a complex options trading strategy among other allegations and complaints.
In November 2021 a customer complained that Da Cruz violated the securities laws by alleging that Da Cruz during the course of 2019 and 2020, EFG, failed to provide the expected and agreed upon level of service specifically with regards to complex option trading causing losses. The investor alleged damages of $4.1 million and the claim is currently pending.
An option is a contract that allows an investor to buy or sell an underlying security at a predetermined price over a certain period of time. Buying an option that allows you to buy shares at a later time is called a “call option,” and buying an option that allows you to sell shares at a later time is called a “put option.” Options are considered derivative securities because their price is derived from the value of the securities or other underlying instruments. The value change in options as they approach expiration is what is called time decay – meaning their value decays over time as expiration nears. Accordingly, an options trading strategy involving many options trades needs to be managed closely. Due to the risks of trading options FINRA has special rules and requirements related to their trading and to qualify investors for options trading.