Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Paul Touradji (Touradji), previously associated with Barclays De Zoete Wedd Securities Inc., has at least one disclosable event. These events include one regulatory, alleging that Touradji recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on January 10, 2025.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant against Touradji Capital Management LP (‘Touradji Capital’) and Paul Touradji (‘Touradji,’ and, with Touradji Capital, ‘Respondents’). In anticipation of the institution of these proceedings, Respondents have submitted an Offer of Settlement (the ‘Offer’) which the Commission has determined to accept. On the basis of this Order and Respondents’ Offer, the Commission finds that these proceedings concern violations of the Advisers Act by Touradji Capital, formerly an investment adviser registered with the Commission, and Touradji, Touradji Capital’s founder, owner, and sole employee. Specifically, Touradji Capital did not withdraw its registration as an investment adviser notwithstanding the firm having less than $90 million in regulatory assets under management, thereby violating Section 203A of the Advisers Act and Rule 203A-1 thereunder. In addition, Touradji Capital did not respond to requests for documents by the Commission’s Division of Examinations, thereby violating Section 204(a) of the Advisers Act. Touradji, as Touradji Capital’s owner and sole employee, caused Touardji Capital’s violations. As a result of the conduct described above, Touradji Capital willfully violated Section 203A of the Advisers Act and Rule 203A-1(a) thereunder; Touradji Capital willfully violated Section 204(a) of the Advisers Act; and Touradji, as owner, chief executive officer, and sole employee of Touradji Capital, caused Touradji Capital’s violations of Sections 203A and 204(a) of the Advisers Act and Rule 203A-1(a) thereunder
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 standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. 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. Finally, the advisor must use their knowledge of the first two elements to consider reasonably available investment option alternatives and come to the conclusion that there is a reasonable basis to believe that the recommendation or advice being provided is in the retail investor’s best interest.
In addition to specific investments being recommended, under Reg BI, a broker must also understand the type of account that their client would need in order to meet their care obligations. The SEC has stated that the type of securities account an investor has can greatly affect a customers’ costs and overall investment returns. Further, different account types can offer and support different features, products, securities, or services, and account type would not be appropriately applied in a one size fits all manner.
Touradji has been in the securities industry for more than 1 year. Touradji has been registered as a Broker with Barclays De Zoete Wedd Securities Inc. since 1996.
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.
