FINRA’s Department of Enforcement investigated Jones alleged misconduct and determined he engaged in unsuitable trading in one of his customer’s accounts. According to FINRA, the customer had a moderate risk tolerance and an investment objective of preservation of capital. Nevertheless, Jones recommended the customer invest a majority of her liquid net worth (about 50%) in five speculative private placements of securities. FINRA further alleged Jones’ recommendations were made without reasonable grounds for believing that they were suitable for the customer.
Based upon the foregoing alleged misconduct, FINRA contends Jones violated NASD Conduct Rules 2310 and FINRA Rule 2110. Under NASD Conduct Rule 2310, financial advisors 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 financial advisor had a duty to recommend suitable investments; the financial advisor breached the duty with unsuitable investments; and the financial advisors 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 and damages investing with Jones through Jones Byrd, 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.