- April 6, 2022
- Network 1 Financial Securities
Eric Nicolassy (CRD#: 6244539) is a registered Broker at Network 1 Financial Securities, Inc., in Red Bank, NJ.
He entered the securities industry in 2020 and only has been registered with Network 1 Financial Securities, Inc.
Current And Past Allegations Of Conduct Leading To Investment Loss
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in March 2022, FINRA sanctioned Eric Nicolassy, ordering restitution of $32,134.09, and suspending him from all capacities for four months, beginning April 18, 2022 and ending August 17, 2022. The FINRA sanction states, “Without admitting or denying the findings, Nicolassy consented to the sanctions and to the entry of findings that he excessively and unsuitably traded a senior customer’s account. The findings stated that although the customer’s account had an average month-end equity of $106,293, Nicolassy executed purchases with a total principal value of $5,138,740 which resulted in annualized turnover ratios of more than 23. Collectively, the trades Nicolassy executed caused the customer to pay $71,409.09 in commissions and $10,410 in trade costs and margin interest, which resulted in an annualized cost-to-equity ratio in excess of 76 percent – meaning the customer’s account would have to grow by more than 76 percent annually just to break even. As a result of Nicolassy’s unsuitable recommendations, the customer suffered more than $125,000 in losses. The findings also stated that Nicolassy exercised discretion in customers’ accounts without having obtained prior written authorization from the customers.”
For a copy of the FINRA sanction, click here.
In addition, Eric Nicolassy has been the subject of three disclosures, including one customer dispute that remain pending, including the following:
- October 2021 — “Suitability, Excessive Trading, Unauthorized Trading, Breach of Fiduciary Duty.” The customer dispute is pending.
- August 2019 — A tax judgment/lien in the amount of $20,819 was imposed.
- November 2018 — A tax judgment/lien of $5,946 was imposed.
For a copy of Eric Nicolassy’s FINRA BrokerCheck, click here.
We Help Investors Recover Investment Losses
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.
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.