Cadaret, Grant & Co., Inc. Broker, William Winchester, Fined By The Tennessee Securities Division Following Allegations
William Winchester (CRD # 4404327 is a Financial Advisor at Cadaret, Grant & Co., Inc., in Chattanooga, TN. William Winchester has been in the securities industry since 2001 and previously worked at Raymond James Financial Services Advisors, Inc, LPL Financial LLC, and Suntrust Investment Services, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in June 2020, William Winchester was fined $45,000 by the Tennessee Securities Division following allegations that Mr. Winchester “engaged in dishonest and unethical practices by failing to disclose to his firm, three loans with three different clients either initially or through annual compliance questionnaires.”
In February 2020, William Winchester was discharged from Raymond James Financial Services, Inc. According to publicly available records released by FINRA Mr. Winchester “failed to disclose a business loan arrangement and two personal loan arrangements with separate clients, including a promissory note with a client related to Financial Advisor’s role as executor of the client’s father’s estate.”
In addition to the above, according to publicly available records released by FINRA, William Winchester had a customer complaint disclosure in April 2018 stating
“Breach of Fiduciary Duty, Negligence, Negligent Supervision, Suitability, Excessive Turnover, Breach of Contract, Negligent Hiring, Selling Away and Violations of FINRA Conduct Rules.” The matter settled for $7,500.
For a copy of William Winchester’s CRD, click https://brokercheck.finra.org/individual/summary/4404327
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:
• Other investments
• Financial situation and needs
• Tax status
• Investment objectives
• Time horizon
• Liquidity needs
• Risk tolerance
• Any other information disclosed by the customer
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