Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker David Griffith (Griffith), currently associated with Lifemark Securities Corp., has at least 4 disclosable events. These events include 4 customer complaints, alleging that Griffith recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $50,000.00 on December 16, 2024.
Client’s allegations pertain to an unsolicited investment in an alternative product, representing a small component of this client’s broader overall diversified portfolio. Advisor David K. Griffith did not recommend the product to the client. Instead, the client, an investor who embraced significant risk, asked Advisor Griffith to make this investment on his behalf. The client was advised of the risks inherent in the investment and signed acknowledgment forms to that effect. The investment was made in October 2020, and the client received several months of interest payments before the issuer filed Chapter 11 bankruptcy. The client’s allegations include claims of unsuitable investment practices, misrepresentation, negligence, breach of fiduciary duty, and breach of contract. \, LifeMark maintains the transactions giving rise to the client’s allegations were suitable and appropriate based on the information available at the time, including the characteristics of the investment product and the client’s financial situation, risk tolerance, and objectives as represented by the client.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $265,000.00 on October 28, 2024.
Allegations pertain to an investment in an alternative product intended to be a small component of a larger diversified portfolio. Investment was purchased in 02/2020. Unfortunately, the company that sold the investment has since filed Chapter 11 bankruptcy. Allegations include an unsuitable recommendation, failure to perform due diligence, negligence, and material misrepresentation. LifeMark believes this to be a suitable and appropriate transaction given the information available at the time of the transaction, concerning the investment product as well as the client’s financials, risk tolerance, and objectives as represented by the client.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $100,001.00 on March 18, 2024.
Allegations pertain to an investment in an alternative product, intended to be a small component of a larger diversified portfolio. Investments were purchased from 03/2020 to 12/2020. Unfortunately, the company that issued the investment has since filed Chapter 11 bankruptcy. As a result, the clients are alleging failure to perform due diligence, material misrepresentation, negligence, and an unsuitable recommendation.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $150,000.00 on November 28, 2023.
Allegations pertain to an investment in an alternative product, intended to be a small component of a larger diversified portfolio. Unfortunately, the company that issued the investment has since filed Chapter 11 bankruptcy. As a result, the clients are alleging negligence, breach of fiduciary duty, breach of contract, and unjust enrichment. Clients purchased the alternative product between February 2020 to March of 2021.
Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated ‘Regulation Best Interest (Reg BI)‘ which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.
Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. Material information always includes information concerning the investor as well as the cost of the recommendation. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.
In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. So, a brokerage firm should not depend solely on the issuer for data about a company instead of performing its own thorough review.
Another protective measure for investors is to mandate broker discloses. FINRA requires the broker to disclosure events such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters on their public BrokerCheck reports. FINRA has recognized that recent studies offer evidence showing that brokers with a past history of regulatory and customer complaint issues are more likely to have such issues in the future. FINRA’s Office of the Chief Economist (OCE) published a study showing the predictability of disciplinary and disclosure events based on past similar events. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.
Griffith entered the securities industry in 1999. Griffith has been registered as a Broker with Lifemark Securities Corp. since 2015.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.
