- December 13, 2019
- David A Noyes & Co.
Jeannette Adcock (CRD # 1432053) is a Financial Advisor at David A. Noyes & Co. in Itasca and Indianapolis, IL. Jeannette Adcock has been in the securities industry since the 1980s and previously worked at Wayne Hummer Investments and Prudential Securities.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), Jeannette Adcock has eight (8) customer complaint disclosures on her CRD. Several of the customer complaint disclosures relate to the sale of illiquid structured certificates of deposit (“CDs”). Structured CDs are also referred to as “market-linked CDs” and “adjustable-rate CDs.”
Structured CDs a/k/a Market Linked CDs are investment vehicles that are linked to one or more securities or market indices. Structured CDs a/k/a Market Linked CDs have a fixed maturity date and are designed to offer specific risk-return tradeoffs, with pre-set formulas for both the potential risk and potential return. These calculations are complex and generally not understood by a “main street” retail investor.
Investors are lured into a structured product with a promise of better returns and principal protection. This is generally not the case. Structured CDs a/k/a Market Linked CDs traditionally pay investors a teaser interest rate in the first 12-36 months of ownership, at which time the formula for calculating interest changes and depends on the performance of the underlying security or index. With the rise of interest rates over the last two years from historic lows, and the corresponding flattening of the yield curve, Structured CDs a/k/a Market Linked CDs pay virtually no income. The investor may be forced to hold the security until maturity at a significantly lower interest rate, sometimes zero, rendering the average interest rate earned on the structured product virtually the same as a traditional, but less costly or more liquid, investment alternative. When the structured products are long-term, the principle value also fluctuates, making early liquidation difficult, if not impossible.
FINRA has issued investor notices with regard to unconventional investments like structured products. NASD (now FINRA) Notice 05-59, which provides specific guidance on structured products, states that “NASD staff is concerned that members may not be fulfilling their sales practice obligations when selling these instruments, especially to retail customers. FINRA mandates that “members must train registered personnel about the characteristics, risks, and rewards of each structured product before they allow registered persons to sell that product to investors….Training…should emphasize that, due to the unique nature of these products, many investors, especially retail investors, may not understand the features of the product, and may not fully appreciate the associated risks of investing in them.”
The sale of esoteric products like Structured CDs a/k/a Market Linked CDs is a growing trend in the securities industry, particularly among independent brokers, due to the high commissions. These structured products generate commissions of approximately 3%.
Among the specific complaints against Jeannette Adcock are the following:
• April 2019—“Client alleges that former representative Jeannette Adcock misled them into buying 3 structured CD’s and 1 structured note for which the clients allege they were never advised that they would mature in 20-25 years or that interest could be zero in some years.” Client alleges damages of $11,335.
• November 2018—”CUSTOMERS ALLEGE THEY WERE NOT GIVEN FULL DISCLOSURE WITH REGARD TO STRUCTURED CD PRODUCT AND DO NOT BELIEVE IT FITS THEIR OBJECTIVE.” Client alleges damages of $71,500.
• September 2018—”Through attorney, customers allege the investments sold were unsuitable for a client of their age. They further allege they were taken advantage of due to their advanced age and trust in Ms. Adcock.” Client alleges damages of $100,000.
• July 2018—”Client alleges that Ms. Adcock failed to clearly explain the risks associated with the structured CD’s purchased by herself and her family members. Client further alleges that proper due diligence was not given and has made demands for return of lost principal.” Client alleges damages of $388,488.
• February 2018—“Children of recently deceased client [REDACTED], were upset that the death put on structured CD [REDACTED] had been exhausted and as such they could not get par value back on this investment. The clients allege no where in the documentation signed by their mother was this limitation noted. This was a verbal complaint.” The dispute was settled for $22,000.
• November 2017—”Client alleges that he wanted an IRA CD and told Ms. Adcock he could not afford to lose principal. Ms. Adcock allegedly told client she could put him in a CD that pays over 7%, was FDIC insured, and was safe. Client alleges she did not mention anything about risk, that he was lied to and misled as he did not know there were different types of CDs, or that the CD invested in securities. So not to lose any more principal, the client sold the CD for a loss. Client has requested to be reward the amount lost.” The dispute was settled for $4,154.
In addition, in 2017, the State of Illinois sanctioned Jeannette Adcock for selling securities within the state while she was not properly registered. The sanction resulted in a fine of $1,000.
Jeannette Adcock was also terminated by Merrill Lynch in 1997 and “permitted to resign” from Wayne Hummer Investments in 2017 after it is alleged that “Ms. Adcock failed to forward a written customer complaint to her supervisor or compliance department as required by firm policy.”
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.
The Wolper Law Firm is litigating multiple claims involving advisors who recommended and sold similar illiquid Structured CDs a/k/a Market Linked CDs. If you have invested in these products, and experienced losses and/or lost income, contact the Wolper Law Firm for a free consultation. The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org.