Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Maria Tsalis (Tsalis), currently associated with the Jeffrey Matthews Financial Group, L.l.c., has at least one disclosable event. These events include one customer complaint, alleging that Tsalis 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 $20,000,000.01 on November 22, 2024.
Client became interested in cryptocurrency in December 2022 and January 2023 and invested in legitimate sites. At the end of January 2023the client requested to liquidate his accounts to invest in NFTS. This was against the recommendation of the representative as a municipal bond portfolio takes years to build. However, the client said that he was too conservative over the years and wanted to increase his wealth. The rep followed his instructions and carefully liquidated his bonds over a course of time. The client directed the rep to wire out funds to a certain company in which he was investing. We followed his directions. When the company names started to change, she questioned him and was told it was the different NFT platforms. All companies were also researched by compliance and found to be listed in the US and not on OFAC. The rep was also told that billionaire investor friends from college were involved that the client did real estate deals for and made them a ton of money. She was told he was receiving statements and had legal contracts drawn up. In April 2023 when he attempted to withdraw his money from the site, he was told he had to pay taxes. He then borrowed money from his brother who agreed to lend him the money to increase his ownership their company. It was then that he finally revealed the name of the NFT platform, Openraritypro.com, this was a fraud site that banked off of Openrarity.com a division of OpenSea.com, two legitimate sites. We found out a woman was also involved as she contacted the client on Facebook and helped lead the whole pig butchering scam. The rep did not endorse the NFT site or investment at all as she was not aware of the site name until April. The statement of claim contains many inaccurate statements.
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. The cost of the recommendation and information about the investor are always included in material information. 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. Accordingly, a brokerage firm may not rely blindly upon the issuer for information concerning a company in lieu of conducting its own reasonable investigation.
Additional investor safeguards include broker disclosure requirements. Brokers are required to disclose reportable events such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters on FINRA’s BrokerCheck reports for public viewing. FINRA has recognized that recent research shows past regulatory and customer complaint issues can indicate future problems for brokers. 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.
Tsalis entered the securities industry in 1989. Tsalis has been registered as a Broker with the Jeffrey Matthews Financial Group, L.l.c. 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.
