OHN MORABITO Give You Unsuitable Advice?
If you invested through Merrill Lynch securities broker John Morabito (CRD#: 4651112, Alpharetta, Georgia), he possibly gave you bad advice. Particularly, Financial Industry Regulatory Authority (“FINRA”) BrokerCheck shows that at least one client complained about his sales practices. Here’s more on the dispute concerning Morabito:
Merrill Lynch Client Suggests In FINRA Arbitration That John Morabito Made Bad Recommendations
Evidently, Merrill Lynch – John Morabito’s employer from September 19, 2005 to March 22, 2018 – reported that a client filed FINRA Arbitration #18-04023 on November 26, 2018. Namely, the client alleged that John Morabito made “unsuitable investment recommendations” about OTC equities.
OTC equities aren’t traded on a regulated exchange like Nasdaq or NYSE. That means that there is no central exchange through which the securities are traded; they are generally illiquid investments. Also, OTC equities contain more risks than those on exchanges given the limited information made available to the public from companies issuing the securities.
Allegedly, John Morabito gave the client bad advice about OTC Equities between 2012 and December 2017. Because of this, on May 29, 2019, Merrill Lynch opted to pay the client $350,000 to settle the dispute.
What Does It Mean For a Broker Like John Morabito To Make Unsuitable Recommendations?
As FINRA points out, suitability obligations are important for ensuring investor protection. Mainly, under FINRA Rule 2111, securities brokers including John Morabito must have a “reasonable basis” in believing that their recommendations are suitable (i.e. appropriate) for investors. When making recommendations, securities brokers must take into account the client’s investment profile. Principally, this includes the client’s age, current investments, needs, financial situation, experience, objectives, investment time horizon and tax status. Brokers generally make unsuitable recommendations when they fail to consider these factors, fail to undertake reasonable due diligence on investments, or excessively trade investments.
Did John Morabito cause you losses? If so, contact Soreide Law Group at (888) 760-6552. Talk with experienced counsel about a potential recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The firm has recovered millions of dollars for investors who have suffered losses due to misconduct of brokers and brokerage firms.