Leonard Rich is the subject of a recent investor complaint. The complaint alleges that Rich has made excessive trading in a customer account. Rich’s trading practices, as well as those of several other financial advisors, have raised concern. Explore the allegations in detail and potential violations of FINRA rules.
Rich was accused of excessive trading and submitting incorrect investment objectives, risk tolerances, and new account forms to the customer in November 2023. This complaint claims damages of $114,500. These allegations indicate that Rich may not have followed FINRA rules regarding suitability and excessive trades.
The securities industry is founded on the principle of suitability. This means that financial advisors are required to make recommendations for investments in accordance with their clients’ financial circumstances, investment goals and risk tolerance. Rich could have neglected these considerations by entering incorrect data and engaging in excessive trades.
When a broker excessively trades in a client’s account to earn commissions, this is known as excessive trading. This practice is forbidden by FINRA. It can cause substantial losses to investors. Rich’s alleged excess trading in a recent complaint raises concerns about his adherence of FINRA’s regulations and his commitment to his clients.
This is not the first complaint Rich has received from investors. In 2012, he was accused of excessive trading and making unsuitable recommendations. He also executed unauthorized trades. The severity of the alleged offenses was reflected in the settlement amount of $350,000. Prior complaints from 2008 and 1996 raised concerns over poor performance, unsuitable recommendation, and unauthorized trades, which resulted in settlements of $25,000, $14,000 and $12,942, respectively.
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The repeated accusations of misconduct and settlements that followed suggest a pattern in behavior which could be harmful to investors. Investors should thoroughly vet and research their financial advisors in order to ensure that their interests are being protected.
Leonard Rich’s extensive experience, which spans over 55 years in the securities business, adds an additional layer of concern. Although experience is important, it does NOT guarantee that an advisor will act ethically or comply with industry regulations. Investors shouldn’t solely depend on an advisor’s tenure, but rather focus on his or her track record and any complaints or disciplinary actions.
Leonard Rich’s practices as a Financial Advisor are seriously questioned by the investor complaint. The allegations of excessive trading, and making unsuitable suggestions suggest possible violations of FINRA rules regarding suitability and churning. Investors need to be diligent and perform thorough due-diligence when choosing a financial advisor in order to protect their financial and investment well-being.