Financial advisor, Geraldine Gordon (Gordon), recently submitted a Letter of Acceptance, Waiver and Consent (“AWC”) to the Financial Industry Regulatory Authority (FINRA. The underlying basis of the investigation involved allegations Gordon recommended an unsuitable, speculative Master Limited Partnership to an investor. As a result of the enforcement action, Gordon was suspended from FINRA for 10 days and fined $7,500.
Gordon (FINRA CRD No. 2499098) entered the financial industry in 1994 as general securities representative. From 1994 to the present, Gordon has worked for Ameriprise Financial Services, Inc. Gordon’s FINRA BrokerCheck contains 8 negative disclosures, including the present investigation.
FINRA’s Department of Enforcement investigated Gordon’s alleged misconduct and found she recommended one of her customers liquidate her diversified account that represented half of her liquid net worth. Gordon then recommended the customer reallocate all of those assets into a Master Limited Partnership that was focused in the energy sector and considered at speculative investment. Allegedly, Gordon’s recommendation overconcentrated the investor’s liquid net worth in a risky and speculative investment.
Based upon the foregoing alleged misconduct, FINRA found Gordon 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.
Here, Gordon’s recommendation that her customer liquidate her diversified holdings and invest primarily in an MLP, constituted an unsuitable investment strategy in violation of FINRA Rule 2111.
Lufrano Law, LLC is a national investment litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. Please contact us at (800) 627-2179 for more information if you have been the victim of investment negligence or fraud.