Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Wesley Gilbreath (Gilbreath), currently associated with Integrity Capital, LLC, has at least one disclosable event. These events include one tax lien, alleging that Gilbreath recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on October 06, 2024.
Approximately 18 years ago, after finishing law school, I took (and passed) the NY Bar. I kept up with my continuing education for maybe a year or two, but then discontinued. I assumed I would be marked ‘inactive’ in the database, which was okay with me as I did not have any intention of practicing law. About 20 days ago, I received an email with an attached ruling, that indicated I was suspended for not continuing to update my registration and contact information on the NY website and pay a registration fee. I contacted the registration division in NY and they have indicated I simply need to sign an attestation that I am retired and they will lift the suspension. I have not submitted the attestation yet but intend to do so in the next week. \, \, To be clear, I have never practiced law and as I will indicate in my attestation, I have no intention of practicing law at any point in the future. This suspension was triggered by a recent amendment to NY law, highlighted in the excerpt below. \, \, ‘We note that, effective December 1, 2023, the Rules of the Chief Administrator of the Courts were amended to require every attorney admitted to practice in New York, whether a resident or nonresident, active or retired, or actively practicing law in New York or anywhere to file their biennial registration electronically through an online program implemented by the Chief Administrator (see Rules of Chief Admr of Cts \\u00a7 118.1 [c], [d]). As a consequence of this rule amendment, all attorneys are required to establish an Online Services account in order to access the electronic registration system. ‘\, \, My point here, is that the ongoing registration for non-practicing lawyers who had not been formally ‘retired’ was a relatively recent development. I have not resided in NY since sometime prior to 2018, and to be candid, was not paying close attention to any emails I’ve received on the matter from NY’s judicial licensing authorities, since it had not bearing on my professional function as a financial professional.\, \, I plan to resolve the matter further and have my suspension lifted by making an attestation.
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.
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.
Gilbreath entered the securities industry in 2023. Gilbreath has been registered as a Broker with Integrity Capital, LLC since 2023.
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.
