In August 2014, Feltl and Company signed a letter of Acceptance, Waiver, and Consent (“AWC”) in which FINRA alleged multiple failures by the firm between 2008 and 2012 concerning Feltl’s penny-stock business, including deficiencies in the firm’s supervisory procedures.
FINRA alleged that Feltl failed to comply with suitability, disclosure, and record-keeping requirements, by for example, not providing certain of its customers with standardized risk disclosure documents two days prior to effecting penny stock transactions in customers’ accounts.
This industry approved risk disclosure document describes the nature and level of risk in the penny stock market and a broker-dealer’s duties to its customers.
FINRA also alleged that Feltl failed to reasonably supervise its penny stock business by not monitoring compliance with Sections 15(g) and 15(h) of the Securities Exchange Act of 1934, , by failing to sufficiently supervise penny stock transactions for compliance with applicable rules and regulations, and by failing to establish, maintain, and enforce written supervisory procedures for its penny stock business. FINRA found that from 2009 to 2012, Feltl failed to annually test and verify its supervisory procedures, submit the required reports and procedures to management, or make the required certifications. Also, during FINRA’s investigation, Feltl was unable to produce certain copies of branch offices’ daily trade blotters in response to FINRA’s request.
Feltl and Company’s registration and disciplinary history
In order to lawfully sell investments to the public, one must either be registered or exempt from registration
Feltl and Company is registered with the SEC, two regulatroy agencies and in 51 states and territories.
According to FINRA’s CRD disclosure report, Feltl and Company has been the subject of a customer complaint and six regulatory investigations.
The Law Office of David Liebrader practices exclusively in the field of investment loss recovery and our securities attorneys have successfully resolved over 1000 investment loss cases over the past 20 years. Recoveries for clients top $40 million. The types of claims we have successfully handled include those involving unsuitable investments (suitability claims), excessive trading or “churning”, misrepresentations and omissions, unauthorized trading, over-concentration of illiquid or overly risky investments, pump and dump scams involving “penny stocks”, direct participation programs (private placements) involving real estate investment trusts (REITS), oil and gas exploration programs, leasing equipment deals and receivable financing, promissory notes whether sold through a broker dealer or as part of the outside business activities of a registered representative, ponzi scheme losses, failure on the part of the broker dealer to perform due diligence, state securities law (blue sky) violations and failure to supervise.
Investment losses can be recovered through a process known as FINRA arbitration. FINRA regulates broker dealers that sell investments, and provides an arbitration forum to resolve investor disputes. Investors can pursue claims against their brokerage firms in the FINRA arbitration forum. Common claims in the forum are those for suitability, breach of fiduciary duty, misrepresentations and omissions, negligence, violation of FINRA rules, state and federal securities laws violations, elder abuse, breach of contract and failure to supervise. On average, the recovery process takes approximately a year, from start to finish.
FINRA’s rules require that all investment recommendations made by licensed financial advisors be suitable in light of a customer’s needs, objectives and risk tolerance. In addition, all registered representatives are required to be properly supervised, with periodic inspections and reviews by qualified supervisors, whose job it is to vigorously investigate suspicions of wrongdoing (red flags).
If you have suffered investment losses please call The Law Office of David Liebrader at (702) 380-3131 for a free, confidential consultation