On December 1, 2020, FINRA’s Department of Enforcement filed a three-cause complaint against Mr. Stevens. The first cause of action charged that Mr. Stevens willfully failed to disclose a judgment and three tax liens on his Uniform Application for Securities Industry Registration or Transfer (Form U4). The second cause of action alleged that Mr. Stevens falsely represented to his firm that he did not have any unreported liens. The third cause of action alleged that Mr. Stevens failed twice to appear and testify at an on-the-record interview.

Mr. Stevens then failed to appear at two-pear hearing conferences scheduled by the hearing officer. FINRA’s Department of Enforcement then requested a default decision, which the hearing officer granted.

Mr. Stevens has been associated with the following broker-dealers:

• D.H. Hill Securities, LLLP in St. Augustine, FL, from June 2006 to February 2020.
• NYLife Securities in St. Augustine, FL, from July 1987 to May 2006.
• Eagle Strategies Corp, from February 1995 to December 1996.

As discussed more fully below, Mr. Stevens has also been the subject of numerous customer disputes that have resulted in monetary settlements to customers.

If you have suffered financial losses investing with Mr. Stevens or suspect that Mr. Stevens did not have your best interest in mind when recommending an investment, account transactions, or annuities, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your account or annuity contract.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Cetera Advisor Networks LLC and Summit Brokerage Services, Inc.

Financial Advisor Charles Thomas Stevens (CRD No. 1698058)

Mr. Stevens has 32 years of experience in the securities industry and has been associated with three brokerage firms.

According to his BrokerCheck report, Mr. Stevens has recently been the subject of three customer complaints concerning investment recommendations that he made related to real estate investment trusts (“REITs”), Business Development Companies (“BDCs”), and variable annuities.

• Customer Dispute (July 2019): In July 2019, a customer filed a securities arbitration complaint seeking $100,000 in damages and alleging that Mr. Stevens made an unsuitable recommendation related to REITs. The customer asserted the following causes of action: common law fraud, breach of fiduciary duty, negligence, breach of contract. The customer dispute is still pending.
• Customer Dispute (December 2017): In December 2017, a customer filed a securities arbitration complaint seeking $150,000 in damages and alleging that Mr. Stevens made an unsuitable recommendation related to REITs and BDCs. The customer asserted the following causes of action: unsuitable recommendations, breach of fiduciary duty, negligence, failure to supervise, and breach of contract. The dispute was settled by D.H. Hill Securities, LLLP, for $30,000.
• Customer Dispute (August 2017): In August 2017, a customer filed a securities arbitration complaint alleging that Mr. Stevens made an unsuitable recommendation related to REITs, BDCs, and a variable annuity. The customer asserted the following causes of action: unsuitable recommendations, breach of fiduciary duty, negligence, failure to supervise, and breach of contract. The dispute was settled by D.H. Hill Securities, LLLP, for $35,000.

D.H. Hill Securities, LLLP – Supervisory Duties

Brokerage firms like D.H. Hill Securities, LLLP must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who understands the FINRA forum and can navigate the arbitration process to effectively advocate on their behalf.

If you or a loved one were a customer of Charles Stevens or D.H. Hill Securities and either sustained financial losses or suspect inappropriate activity in your investment or retirement accounts, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.

Mr. Rigoni has been associated with the following broker-dealers:

• Cetera Advisor Networks LLC in Lake Forest, Illinois, from September 2019 to August 2020.
• Summit Brokerage Services, Inc. in Lake Forest, Illinois, from November 2010 to September 2019.
• Cambridge Investment Research, Inc. in Lake Forest, Illinois, from October 2008 to December 2010.
• Edward Jones in Antioch, Illinois, from October 2000 to November 2008.

According to this public disclosure report with FINRA, Cetera Advisor Networks, LLC allowed Mr. Rigoni to “voluntarily resign” after Mr. Rigoni was named a Respondent in the FINRA complaint alleging that he willfully failed to timely amend his Form U4 to disclose unsatisfied federal and state tax liens.

Mr. Rigoni has also been associated with the following entities: NSCG Insurance Solutions, LLC; Retirement Zone Radio; North Shore Capital Group; and Retirement Life Pro.

As discussed more fully below, Mr. Rigoni has also been the subject of numerous customer disputes that have resulted in monetary settlements to customers.

If you have suffered financial losses investing with Rigoni or suspect that Mr. Rigoni did not have your best interest in mind when recommending an investment, account transactions, or annuities, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your account or annuity contract.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Cetera Advisor Networks LLC and Summit Brokerage Services, Inc.

Financial Advisor Victor A. Rigoni III (CRD No. 4272056)

Mr. Rigoni has 19 years of experience in the securities industry and has been associated with four different brokerage firms.

According to his BrokerCheck report, Mr. Rigoni has been the subject of five customer complaints concerning investment recommendations that he made related to variable annuities, real estate investment trusts (“REITs”), and Exchange Traded-Funds (“ETFs”):

• Customer Dispute (November 2019): In November 2019, a customer filed a securities arbitration complaint seeking $99,000 in damages and alleging that Mr. Rigoni and Summit Brokerage Services made an unsuitable recommendation related to a variable annuity contract. The customer also alleged that Summit Brokerage Services breached its contract with the client. The dispute was settled for $18,000.
• Customer Dispute (May 2019): In November 2019, a customer filed a securities arbitration complaint that alleged $100,000 in damages arising out of a REIT The customer alleged breach of fiduciary duty, common law fraud, and negligence. Summit Brokerage Services settled the matter for $25,000.
• Customer Dispute (April 2019): In April 2019, a customer filed a securities arbitration complaint that alleged $100,00 in damages arising out of recommendations to invest in a REIT and variable annuity. The customer alleged breach of contract, fraud, misrepresentation, breach of fiduciary duty, and violation of FINRA rules. Summit Brokerage Services and Mr. Rigoni settled the matter for $13,999.
• Customer Dispute (October 2018): In October 2018, a customer filed a securities arbitration complaint that alleged $125,000 in damages arising out of a recommendation to invest in a real estate security. The customer alleged breach of contract, fraud, misrepresentation, breach of fiduciary duty, and violation of FINRA rules. Summit Brokerage Services settled the matter for $12,000.
• Customer Dispute (November 2010): In November 2010, a customer submitted a written complaint to Cambridge Investment Research, Inc., alleging $80,000 in damages. The customer alleged that (1) prior to transferring the investment account from Cambridge Investment Research, Inc. to Summit Brokerage Services, Inc., Mr. Rigoni liquidated holdings in the account for the purpose of generating new commissions at Summit Brokerage Services, Inc.; (2) Mr. Rigoni generated excessive commission; (3) investment were not suitable; and (4) Mr. Rigoni engaged in unauthorized trading; and (5) Mr. Rigoni made poor recommendations. Cambridge Investment Research, Inc. and Mr. Rigoni settled the dispute for $63,742.

Cetera Advisor Networks, LLC and Summit Brokerage Services, Inc. – Supervisory Duties

Brokerage firms like Cetera Advisor Networks, LLC and Summit Brokerage Services, Inc. must properly supervise financial advisors and customer accounts. Brokerage firms must also establish and maintain a reasonably designed system to oversee account activity to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who understands the FINRA forum and can navigate the arbitration process to effectively advocate on their behalf.

If you or a loved one were a customer of Victor Rigoni and either sustained financial losses or suspect inappropriate activity in your investment or retirement accounts, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

FINRA suspended Ms. Brumm for recommending two unsuitable variable annuities to a customer, borrowing $40,000 from the same customer, and negligently misrepresenting the effect of a withdrawal from a variable annuity to another customer.

If you have suffered financial losses investing with Lisa Brumm or suspect that Ms. Brumm did not have your best interest in mind when recommending investments, annuities, or annuity switches, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your account or annuity contract.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as AXA Advisors, LLC and Woodbury Financial Services, Inc.

FINRA Letter of Acceptance, Waiver, and Consent No. 2019062286101

Lisa Brumm and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on February 3, 2021, over her conduct from December 2016 to April 2017, while employed by AXA Advisors, LLC (now known as Equitable Advisors LLC).

Unsuitable Variable Annuity Recommendations

According to FINRA, in December 2016, Ms. Brumm recommended two unsuitable variable annuities totaling $400,000 to a customer. Specifically, FINRA alleged:

• In December 2016, Ms. Brumm recommended that a customer invest a total of $400,000 into two deferred variable annuities and purchase a guaranteed minimum death- and income benefit rider associated with one of them.
• Brumm lacked a reasonable basis to believe that the customer would benefit from the features of deferred variable annuities or that the particular deferred variable annuities, including the rider, were suitable for the customer.
• At the time, the customer was 28 years old, in the 15 percent tax bracket, and starting her own business.
• The customer’s time horizons for the two deferred variable annuity contracts—seven and fifteen years—were too short for the customer to achieve tax deferral benefits without subjecting herself to tax penalties.
• The customer’s financial goals also did not include annuitization. Because the income-benefit feature of the rider provided a guaranteed minimum annuitization value, and only after fifteen years, it was not suitable for the customer.
• The customer, who had no dependents, also did not have financial needs that would have been served by the death benefit feature of the rider.

A variable annuity is a contract between an investor and an insurance company, through which the insurance company makes periodic payments to the investor or a beneficiary designated by the investor. A variable annuity serves as an investment account that may grow on a tax-deferred basis, includes insurance features, and offers the investor periodic income payments. Variable annuities allow customers to choose from a complex array of contract features and investment options, including various share classes and optional riders. Each variable annuity is unique. The investor pays extra for the features offered by variable annuities.

Variable annuities can help investors meet retirement or other long-term goals. However, variable annuities are not suitable for all investors, especially for investors with short-term needs or objectives. Variable annuities are complex and can be costly due to fees or taxes and surrender charges that may apply if money is withdrawn early. Variable annuities also involve investment risks and include contract fees. Accordingly, financial advisors must exercise particular care to ensure that the purchase or exchange of variable annuity is suitable for a customer before recommending the product to a customer.

FINRA Rule 2111 requires that all investment recommendations be in the best interest of the customer. FINRA Rule 2330 provides investors with additional protections related to annuities. The rule requires that when a financial advisor recommends an exchange of a variable annuity, the financial advisor must consider whether the customer would incur a surrender charge, be subject to a new surrender period, lose existing benefits (such as death, living, or other contractual benefits), or be subject to increased fees or charges (such as mortality and expense fees, investment advisor fees, or charges for riders and similar product enhancements).

Borrowing from a Customer

In addition to recommending the two unsuitable variable annuities to her 28-year-old customer, FINRA also alleged that she borrowed $40,000 from the same customer.

FINRA Rule 3240 prohibits brokers from borrowing money from a customer unless, among other things, the member firm has written procedures allowing the borrowing, and the broker complies with certain notice requirements.

FINRA alleged that on April 11, 2017, Ms. Brumm entered into an oral agreement to borrow $40,000 from her customer. At the time, Ms. Brumm was registered through AXA Advisors, LLC. AXA Advisors, LLC’s written procedures did not permit Ms. Brumm to borrow from her customer. In September 2017, Ms. Brumm and the customer reduced their agreement to writing in the form of a promissory note, and in November 2017, Ms. Brumm repaid the loan with the $2,000 of agreed-upon interest.

Negligent Misrepresentation

According to FINRA, in February 2017, Ms. Brumm negligently misrepresented to another customer the effect of a withdrawal from a variable annuity. Specifically, FINRA alleged:

• In January 2017, a customer approached Ms. Brumm about withdrawing $20,000 from a variable annuity that had a value of approximately $22,000.
• At the time, the customer received $561 each month from the variable annuity through a systematic payment.
• To assist the customer in deciding whether to withdraw the funds, Ms. Brumm offered to determine whether the withdrawal would affect the monthly payments.
• In early February 2017, Ms. Brumm misrepresented to the customer that the withdrawal would reduce the monthly payments to $290 per month but would not eliminate them.
• Brumm should have known that the customer would not continue to receive monthly payments of $290.
• Based on Ms. Brumm’s misrepresentation, the customer went forward with the withdrawal.
• Under the customer’s contract, the withdrawal had the effect of stopping all systematic monthly payments.
• The customer also incurred about $600 in charges and fees associated with the withdrawal.
• She subsequently entered into a settlement with AXA Advisors, LLC that made her whole for her losses.

AXA Advisors, LLC & Woodbury Financial Services, Inc.: A Duty to Supervise

Financial institutions, like AXA Advisors, LLC and Woodbury Financial Services, Inc, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as mutual fund switches and the improper use of discretion, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to sufficiently supervise its financial advisors or the investment account activity, it may be liable for investment losses sustained by customers.

How to Recover Losses or Obtain a Free Consultation

If you have suffered financial losses investing with Lisa Brumm or suspect that Ms. Brumm did not have your best interest in mind when recommending investments, annuities, or annuity switches, contact New York securities arbitration lawyer August Iorio of Iorio Altamirano LLP at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.

If you do not invest, you miss out on opportunities to increase your wealth. However, all investments carry risk, and when you invest, you have the potential to lose money.

There are many different types of investments. Some common types of investments include stocks, bonds, certificates of deposit, mutual funds, money market funds, exchange-traded funds, and annuities. There are also more complex investment vehicles, such as real estate investment trusts (REITs), unit investment trusts (UITs), hedge funds, commodities, and private placements.

Deciding how to invest your money or retirement savings can be challenging for busy Americans and even intimidating for investors who do not know where to put their hard-earned savings. Investors often turn to financial advisors for advice and recommendations.

Financial professionals must make suitable recommendations that are in the best interest of the investor. This obligation is mandated by the Securities and Exchange Commission (SEC). That is why financial advisors and brokerage firms ask investors about their risk tolerance, investment objective, investment experience, and more.

Iorio Altamirano LLP is a securities arbitration law firm based in New York City. We represent investors nationwide who have suffered investment losses as a result of wrongful conduct by financial advisors and brokerage firms.

Whether you invest by yourself or with a financial advisor, below are some New Year resolutions all investors should adopt:

1. If you do not understand an investment, do not invest in it.

Do not invest in securities or investment strategies unless you understand the investment and its risks. This is the best investment advice to protect your wealth while investing.

2. Research a broker’s background, credentials, and disciplinary history, before investing.

Details on a financial advisor’s background and qualifications are available for free on FINRA’s BrokerCheck website. For individual brokers, the report will show you the brokers’ current and past employment history, both in and outside the brokerage industry, the broker’s licenses, and qualification exams undertaken. The report also discloses any criminal felonies, investment-related crimes, industry disciplinary actions or investigations, investment-related civil actions, bankruptcy proceedings, judgments and liens, and terminations.

3. Avoid being the victim of investment fraud with these helpful suggestions.

All investors, including sophisticated and savvy investors, can suffer investment losses, or worse, be scammed. Here are some helpful suggestions to avoid being the victim of investment fraud:

• Ask questions before you invest and do your own independent research.
• Research before you invest. You can check out many investments by searching the SEC’s EDGAR filing system.
• Know the salesperson and check out the disciplinary history of brokers and advisors.
• Be wary of unsolicited offers. That is, be especially careful if you receive a sales pitch that you did not ask for or sought out.
• Be cautious if the investment sounds too good to be true, the salesperson “guarantees returns,” or you experience high-pressure sales tactics. Be mindful of the following warning signs:
  • High returns with little or no risk.
  • Overly consistent returns.
  • Unregistered investments.
  • Unlicensed sellers.
  • Secretive or complicated strategies.
  • Issues with paperwork.
  • Difficulty receiving payments.

4. Guard against excessive trading in your brokerage account.

Excessive trading occurs when a stockbroker ignores his obligations and makes a large number of trades in a customer’s account, not to benefit the customer but to generate commissions for the broker. Here are three ways to protect yourself against excessive trading:

• Review your account documents, including account opening documents. Make sure that your investment objectives and risk tolerance levels are accurately recorded.
• Regularly review your account statements and trade confirmations for unauthorized trades, high-volume trading activity, and excessive fees or commissions.
• If you do not understand your account statements or transactions in your accounts, ask questions. It is your money. If you identify any signs of excessive trading, ask questions, and speak to a branch manager. If you have suffered harm, you should also contact a securities arbitration attorney for a free case evaluation and confidential review of your account.

5. Contact a securities arbitration lawyer if you have been harmed.

If you have suffered investment losses or have otherwise been harmed by investment advice that was not in your best interest, contact a securities arbitration attorney.

Iorio Altamirano LLP is a securities arbitration law firm based in New York City. We are experienced securities arbitration attorneys, and we represent investors nationwide who have suffered investment losses due to wrongful conduct by financial advisors and brokerage firms. We offer a bold approach and aggressively pursue the recovery of investment losses on behalf of our clients. We are investor advocates.

Initiating a securities arbitration can be daunting for any investor, regardless of sophistication and net worth. Investors may also be deterred from filing a securities arbitration claim because of unfamiliarity with the forum or costs involved in pursuing a claim. Iorio Altamirano LLP is here to help.

If you believe that you may have been a victim of securities fraud or other wrongful conduct by your financial advisor or brokerage firm, contact our experienced securities arbitration attorneys for a free case evaluation.

FINRA alleged that between January and August 2018, while employed by J.P. Morgan Securities LLC in The Villages, Florida, Mr. Zakhary made unsuitable recommendations to three customers to sell variable annuities and replace them with fixed annuities, in violation of FINRA Rules 2111 and 2010.

Paul Zakhary was a financial advisor at J.P. Morgan Securities LLC from October 2017 until August 2019., working out of the firm’s branch office in Ocala, Florida. J.P. Morgan Securities LLC terminated Mr. Zakhary’s employment for violating the firm’s annuity switch policy related to annuity surrenders and managed brokerage transactions.

Previously, Mr. Zakhary was a financial advisor for Edward Jones in Orlando, Florida, from October 2014 until September 2017.

If you have suffered financial losses investing with Paul Zakhary, or suspect that Mr. Zakhary did not have your best interest in mind when recommending investments, annuities, or annuity switches, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your account or annuity contract.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as J.P. Morgan Securities and Edward Jones.

FINRA’s Allegations – Paul Zakhary Recommended Unsuitable Exchanges of Annuities

Between January and August 2018, Mr. Zakhary made recommendations to three customers to sell variable annuities and replace them with fixed annuities. Zakhary lacked a reasonable basis for making the recommendations that the customers sell their variable annuities because he did not sufficiently understand the transactions, and as a result, failed to execute 1035 exchanges. Specifically, FINRA alleged:

• Zakhary recommended that three customers liquidate their variable annuities and use the proceeds to purchase fixed annuities.
• Zakhary advised the customers to liquidate their variable annuities directly with the issuing company and assisted them with that process.
• The customers then deposited the proceeds with J.P. Morgan.
• On Mr. Zakhary’s recommendation, each of the customers used the proceeds of their variable annuity liquidations to purchase fixed annuities through J.P. Morgan.
• When he made the recommendations, Mr. Zakhary lacked a reasonable understanding of the variable annuity products.
• Zakhary did not understand or consider the different subaccount investment options available within the variable annuity products before recommending the liquidations.
• Further, he did not understand when and how to execute a 1035 exchange to avoid immediate tax consequences for the customers when liquidating the variable annuities.
• As a result, 1035 exchanges were not used for the customers, and taxes became due on the proceeds immediately, rather than being deferred.

Variable Annuity, Fixed Annuity, and Exchanges

An annuity is a contract between an investor and an insurance company. The insurance company promises to make periodic payments to the investor or a beneficiary designated by the investor. A fixed annuity pays the policyholder a specific, guaranteed interest rate on their contributions to the account. In contrast, the interest paid by a variable annuity can fluctuate based on the performance of an investment portfolio chosen by the account’s owner.

An annuity serves as an investment account that may grow on a tax-deferred basis, includes insurance features, and offers the investor a periodic income payment. Annuities allow customers to choose from a complex array of contract features and investment options, including various share classes and optional riders. Each annuity is unique. The investor pays extra for the features offered by annuities.

Annuities can help investors meet retirement or other long-term goals. However, annuities are not suitable for all investors, especially for investors with short-term needs or objectives. Annuities are complex and can be costly due to fees or taxes and surrender charges that may apply if money is withdrawn early. Annuities also involve investment risks and include contract fees. Accordingly, financial advisors must exercise particular care to ensure that the purchase or exchange of annuity is suitable for a customer before recommending the product to a customer.

FINRA Rule 2111 requires that all investment recommendations be in the best interest of the customer. FINRA Rule 2330 provides investors with additional protections related to annuities. The rule requires that when a financial advisor recommends an exchange of an annuity, the financial advisor must consider whether the customer would incur a surrender charge, be subject to a new surrender period, lose existing benefits (such as death, living, or other contractual benefits), or be subject to increased fees or charges (such as mortality and expense fees, investment advisor fees, or charges for riders and similar product enhancements).

J.P. Morgan Securities LLC – A Duty to Supervise

Financial institutions like J.P. Morgan Securities LLC must properly supervise financial advisors and customer accounts. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as annuity switches, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

If you were an investor of Paul Zakhary and have suffered investment losses, or suspect that Mr. Zakhary did not have your best interest in mind when recommending investments, annuities, or annuity switches, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account or annuity contract.

Additionally, if you were a J.P. Morgan Securities LLC customer and have suffered investment losses, or suspect wrongful conduct with respect to annuities, contact Iorio Altamirano LLP today for a free and confidential review of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.

Arbitration is the primary forum for resolving disputes between investors and brokerage firms or financial advisors because the parties have contractually agreed to use arbitration as an alternative dispute resolution process. When an investor opens an account with a broker-dealer, the investor is required to sign an array of account opening documents. These account opening documents regularly include an arbitration clause, which requires that arbitration be used as an alternative to litigation. This requirement is often a contractually binding obligation for both parties. As a result, disputes between investors and financial advisors or brokerage firms are resolved in arbitration as an alternative to court.

The Financial Industry Regulatory Authority (FINRA) is authorized by Congress to regulate the financial services industry and operates the largest arbitration forum for securities disputes. Most securities arbitrations take place using FINRA’s Dispute Resolution Services’ arbitration forum because, as FINRA members, financial advisors and brokerage firms are required to arbitrate customer complaints upon the filing of a claim through FINRA.

Brokerage-firms and financial advisors are required to have a customer’s best interest in mind when they make investment recommendations or offer investment advice. Unfortunately, that is not always the case. Instead, financial advisors or broker-dealers often recommend unsuitable investments, withhold or misrepresent material information, place their financial interests ahead of the investors, or trade without authorization. The result of this negligent conduct or fraud can lead to investment losses.

According to FINRA’s latest statistics, here are the top 15 security types in 2020 arbitrations filed by customers against their brokerage firms or financial advisors:

1. Real Estate Investment Trust.
2. Common Stock.
3. Private Equities.
4. Business Development Company.
5. Mutual Funds.
6. Options.
7. Municipal Bonds.
8. Limited Partnerships.
9. Municipal Bond Funds.
10. Annuities.
11. Exchange-Traded Funds.
12. Variable Annuities.
13. Corporate Bonds.
14. 401(k) Accounts.
15. Government Securities.

Initiating a securities arbitration can be daunting for any investor, regardless of sophistication and net worth. Investors may also be deterred from filing a securities arbitration claim because of unfamiliarity with the forum or costs involved in pursuing a claim. Iorio Altamirano LLP is here to help.

Iorio Altamirano LLP is a securities arbitration law firm based in New York City. We are experienced securities arbitration attorneys, and we represent investors nationwide who have suffered investment losses as a result of wrongful conduct by financial advisors and brokerage firms. We offer a bold approach and aggressively pursue the recovery of investment losses on behalf of our clients. We are investor advocates.

If you believe that you may have been a victim of securities fraud or other wrongful conduct by your financial advisor or brokerage firm, contact our experienced securities arbitration attorneys for a free case evaluation.

FINRA alleged that between January 2016 and April 2018, while employed by Cadaret, Grant & Co., Inc. in Bronxville, New York, Mr. Pandekakes recommended four unsuitable exchanges of variable annuities, in violation of FINRA Rules 2111, 2330, and 2010.

Timothy Pandekakes was a financial advisor at Cadaret, Grant & Co., Inc. from December 2004 through June 2019. During the same period, he was also affiliated with MDIC Investment Company in Bronxville, New York. According to public records, Mr. Pandekakes’ employment was terminated by Cadaret, Grant & Co., Inc. in June 2019 for engaging in investment practices inconsistent with firm expectations.

Since August 2019, Mr. Pandekakes has been employed by American Portfolios Financial Services, Inc. in Yonkers, New York. He has also been affiliated with an entity named MDIC Investment.

If you have suffered financial losses investing with Timothy James Pandekakes, or you were sold an annuity that you suspect may not have been suitable for you, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your investments.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Cadaret, Grant & Co., Inc. and American Portfolios Financial Services, Inc.

What is a Variable Annuity?

A variable annuity is a contract between an investor and an insurance company, whereby the insurance company promises to make periodic payments to the investor or a beneficiary designated by the investor. A variable annuity serves as an investment account that may grow on a tax-deferred basis, includes insurance features, and offers the investor to receive periodic income payments. Variable annuities allow customers to choose from a complex array of contract features and investment options, including various share classes and optional riders. Each variable annuity is unique. The investor pays extra for the features offered by variable annuities.

Variable annuities can help investors meet retirement or other long-term goals. However, variable annuities are not suitable for all investors, especially for investors with short-term needs or objectives. Variable annuities are complex and can be costly due to fees or taxes and surrender charges that may apply if money is withdrawn early. Variable annuities also involve investment risks and include contract fees. Accordingly, financial advisors must exercise particular care to ensure that the purchase or exchange of variable annuity is suitable for a customer before recommending the product to a customer.

FINRA Rule 2111 requires that all investment recommendations be in the best interest of the customer. FINRA Rule 2330 provides investors with additional protections related to annuities. The rule requires that when a financial advisor recommends an exchange of a variable annuity, the financial advisor must consider whether the customer would incur a surrender charge, be subject to a new surrender period, lose existing benefits (such as death, living, or other contractual benefits), or be subject to increased fees or charges (such as mortality and expense fees, investment advisor fees, or charges for riders and similar product enhancements).

FINRA’s Allegations – Pandekakes Recommended Four Unsuitable Exchanges of Variable Annuities

From January 2016 through April 2018, Mr. Pandekakes recommended four unsuitable exchanges of variable annuities. Specifically, FINRA alleged:

• Pandekakes recommended that two customers, who were a married couple nearing retirement, exchange four variable annuities without having a reasonable basis to believe that the exchanges were suitable for them.
• In each instance, Mr. Pandekakes recommended that the customers exchange the variable annuity during its surrender period, which caused the customers to pay $44,406.17 in surrender fees.
• Moreover, in each instance, the recommended exchange caused the customers to lose living and death benefits, such as long-term income riders with guaranteed growth rates, for which they had already paid.
• In addition, each recommended exchange subjected the customers to a new surrender period.

FINRA’s Letter of Acceptance, Waiver, and Consent No. 2019061498801 ordered Mr. Pandekakes to pay partial restitution of $20,000, plus interest to the married couple.

An order by FINRA to pay partial restitution to customers does not preclude investors from pursuing their own claims to seek restitution or other available remedies.

Cadaret, Grant & Co., Inc. – A Duty to Supervise

Financial institutions like Cadaret, Grant & Co., Inc. must properly supervise financial advisors and customer accounts. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as variable annuity switches, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

If you were an investor of Timothy James Pandekakes and have suffered investment losses, or suspect that Mr. Pandekakes did not have your best interest in mind when recommending investments, annuities, or annuity switches, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account or annuity contract.

Additionally, if you were a customer of Cadaret, Grant & Co., Inc. and have suffered investment losses, or suspect wrongful conduct with respect to annuities, contact Iorio Altamirano LLP today for a free and confidential review of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.