Securities Lawyers Blog
Advisor and broker Ralph Byer (Byer), currently employed by Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch), has a substantial complaint history. Byer has been subject to at least seven customer complaints during the course of his career. According to a BrokerCheck report, the majority of his customer complaints (four out of seven) concern unsuitable investment recommendations.
In June 2018, a customer alleged Byer engaged making unsuitable investment recommendations and excessive trading from 1990 until 2018. Ultimately this matter settled for $565,000.00. Additionally, from 2001 through 2009, three other known customer complaints were brought against Byer for making unsuitable investments. Moreover, in 1999, a customer alleged Byer engaged in churning. That matter ultimately settled in favor of the client for $22,500.00.
Advisors have an obligation to make only suitable recommendations for investments to the client. There are many investments that are not appropriate for the majority of investors or for certain investors given their risk tolerance, age, and other factors. Advisors should not present these investment options to clients. There are two screens that advisors must employ to determine whether an investment is suitable for a client. First, there must be a reasonable basis for the recommendation – meaning that the product has been investigated and due diligence conducted into the investment’s features, benefits, risks, and other relevant factors. The advisor must conclude that the investment is suitable for at least some investors and some securities may be suitable for no one. 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.