Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker John Nole (Nole), currently associated with Paulson Investment Company LLC, has at least 3 disclosable events. These events include 3 customer complaints, alleging that Nole 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 $400,000.00 on October 22, 2024.
Claimants allege that respondent Paulson, acting through Nole, improperly recommended that Claimants invest monies in GWG Holdings, Inc., L Bonds. Claimants further allege that Paulson, acting through Nole, falsely represented that this investment was backed by life insurance policies and was completely safe, and that Paulson failed to conduct a reasonable due diligence on GWG. Claimants allege this investment was misrepresented to them, and this investment was inconsistent with their risk tolerance and investment objectives.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $950,000.00 on March 01, 2024.
Claimants allege that respondent Paulson, acting through Nole, improperly recommended that Claimants invest monies in GWG Holdings, Inc., L Bonds. Claimants further allege that Paulson, acting through Nole, falsely represented that this investment was backed by life insurance policies and was completely safe, and that Paulson failed to conduct a reasonable due diligence on GWG. Claimants allege this investment was misrepresented to them, and this investment was inconsistent with their risk tolerance and investment objectives.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $250,000.00 on May 24, 2023.
An Arbitration was filed against Paulson Investment Company, LLC alleging that during the period from October 20, 2020, through January 19, 2021, John Nole made unsuitable recommendations to purchase $250,000 of GWG L Bonds.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. This Reg BI standard of care applies to registered representatives making recommendations to customers in the purchase, sale, or exchange of securities or the implementation of investment strategies involving securities and non-securities. The rule also applies to the handling of opening accounts such as account transfers and types of accounts being recommended to be opened. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions. Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. The associated person must then apply both their reasonable diligence into various investment options as well as the information gathered as to the investor’s specific needs when considering the investment recommendation. The broker must explore various alternative investment options available to address these needs and determine that there is a reasonable basis to believe that the recommendation or service being recommended is in the retail investor’s best interest.
Finally, an advisor must also analyze the specific account features offered and determine whether their client can benefit from them in order to meet their care obligations. While securities and investments come with costs that must be considered, the type of securities account also has changes the cost equation for the investor and can change the retail customers’ future investment returns. The associated person must consider the different types of securities accounts for their client and determine whether or not the cost or features are reasonably needed for the client or if the customer’s current account costs and features are superior to solutions available to the advisor. In any event, the type of account and services recommended must be in the investor’s best interest.
Nole entered the securities industry in 1987. Nole has been registered as a Broker with Paulson Investment Company LLC since 2016.
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.
