FINRA’s Department of Enforcement investigated Rittberger’s alleged misconduct and found he participated in the unsuitable recommendation of UITs to five customers totaling approximately $198,000. A UIT is a type of investment company that issues securities, typically referred to as “units,” which represent undivided interests in a relatively fixed portfolio of securities. According to FINRA, the UITs that are at issue were multiple similar series municipal-income UITs issued by the same product sponsor.
FINRA alleged Rittberger failed to conduct reasonable due diligence before recommending the UITs to customers. For example, Rittberger did not read the prospectuses or other sales literature, nor did he attempt to learn more about the UITs from wholesalers or any other employees of the issuing product sponsor. As a result, FINRA alleged Rittberger failed to understand basic components and attendant risks associated with the municipal-income UITs, such as the fact that the underlying portfolios were leveraged or could invest in junk bonds.
Based upon the foregoing alleged misconduct, FINRA contends Rittberger violated FINRA Rules 2010 and 2111. Under FINRA Rule 2111, registered representatives are required to recommend suitable investments and investment strategies to their clients (known as the suitability rule). Typically, a claim for unsuitable investments is brought as a form of a negligence claim with the theory: the representative had a duty to recommend suitable investments; the representative breached the duty with unsuitable investments; and the representative’s unsuitable investments caused the investor damages.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. If you suffered investment losses investing with Rittberger through Huntington Investment, you may be able to recover your losses through FINRA arbitration. Our firm only receives a fee if you recover money. Please complete the contact form or contact one of our attorneys at (800) 627-2179 to schedule a free consultation.