Aurora Securities Broker, Clark Harris, Discharged for Allegedly Recommending Illiquid Investments
Clark Harris (CRD#: 2730928) is a registered Broker at Aurora Securities in Troy, MI and previously a registered Investment Advisor at SPC. He entered the securities industry in 1996 and previously worked for Sigma Financial COrporation; Linsco/Private Ledger Corp.; John Hancock Mutual Life Insurance Company; and John Hancock Distributors, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in April 2021, Clark Harris was discharged by SIgma Financial Corporation. The allegation states, “The firm has reason to believe that the registered representative solicited, recommended, and sold illiquid alternative investments to one or more customers without possessing a qualifying FINRA license to do so, and that the representative took steps to conceal this activity from the firm.”
In addition, Clark Harris has been the subject of one previous customer complaints, including the following:
● March 2021—”Investigating whether he received securities compensation for recommending alternative investments for which he was not registered to do so.” An investigation into Clark Harris’s work was initiated by FINRA.
● January 2012—”REGISTERED REPRESENTATIVE INITIATED A WITHDRAWAL FROM THE VARIABLE ANNUITY CAUSING THE GUARANTEED MINIMUM WITHDRAWAL BENEFIT RIDER TO DECREASE THEREFORE CAUSING THE CLIENT TO RECEIVE LESS ANNUAL INCOME.” The customer dispute was settled for $69,000.
For a copy of Clark Harris’s FINRA BrokerCheck, click here.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.
Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s age, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.
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