Despite Rule Change, FINRA’s BrokerCheck Tags No ‘Restricted’ Firms?
Nine months after FINRA began ...
20 June, 2024 No commentPeiffer Wolf is currently investigating claims against LPL Financial for failing to supervise the activities of its former broker David Taddeo relating to private securities transactions and variable annuity misrepresentations. Taddeo worked out of LPL Financial’s La Mesa, California branch while associated with the national broker-dealer.
We have recovered millions for investors and remain committed to fighting on your behalf. If you’ve invested with David Taddeo through LPL Financial, Contact Us today by filling out a Contact Form or by calling 585-310-5140 to schedule a FREE Case Evaluation.
According to FINRA’s BrokerCheck, David Taddeo is a former registered representative of Morgan Stanley. He was discharged by LPL Financial in February 2024 relating to his directing firm clients to participate in private securities transactions in which he also participated. Taddeo was associated with LPL Financial from September 2000 to February 2024. He was previously associated with Financial Network Investment Corporation from 1998 to 2000 and American Pacific Securities Corporation from 1983 to 1984.
David Taddeo has been subject to numerous customer disputes since 2020, including:
Brokers that make recommendations concerning a variable annuity to a retail customer must comply with Regulation Best Interest. This regulation establishes a “best interest” standard of conduct for broker-dealers like LPL Financial when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of variable annuities.
Prior to recommending the purchase or exchange of a deferred variable annuity, a broker must make reasonable efforts to determine the customer’s age, annual income, investment experience, investment objectives, investment time horizon, existing assets, and risk tolerance.
Importantly, FINRA requires brokers to not make misrepresentations to its customers. FINRA Rule 2211 sets forth the requirements and guidelines for how brokers should communicate with their customers about variable annuities. Misrepresenting the features of a variable annuity is a basis for liability for a FINRA arbitration claim.
Financial advisors (brokers) have a legal obligation and regulatory obligation to recommend only suitable investments that are appropriate for their clients. Their broker-dealer (employing brokerage firm) has a legal and regulatory obligation to supervise the financial advisor’s sales practices and dealings with clients. To the extent that any of these duties are breached, the customer may be entitled to a recovery of their investment losses.
Chief among these duties is to ensure that recommendations are suitable for customers, considering their investment objectives, risk tolerance, and investment time horizon.
Brokers like David Taddeo must have a firm understanding of both the product they sell and their customer, according to the FINRA Suitability Rule. Recommending an unsuitable investment strategy results in liability, and is a basis for a FINRA arbitration claim.
If you believe you were a victim of investment fraud or broker misconduct, it is imperative to take action. Peiffer Wolf has represented thousands of victims and we remain committed to fighting on behalf of investors.
If you’ve invested with David Taddeo through LPL Financial, Contact Us today by filling out a Contact Form or by calling 585-310-5140 to schedule a FREE Case Evaluation.
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