- September 8, 2023
- Commonwealth Financial Network
Billy Stanage Jr. (CRD#: 4450674) was a previously registered broker and investment advisor at Commonwealth Financial Network, in Rio Rancho, NM.
He entered the securities industry in 2001. He previously worked for Commonwealth Financial Network; Securities America, Inc.; Foothill Securities, Inc.; Cetera Advisor Networks LLC; and FFP Securities.
Current and Past Allegations of Misconduct
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in July 2023, FINRA permanently barred Billy Stanage Jr. The sanction states, “ On March 7, 2023, Commonwealth Financial Network filed a Uniform Termination Notice for Securities Industry Registration (Form U5) stating that it had discharged Stanage for “[f]ail[ing] to obtain firm approval for [an] outside business activity.” On June 1, 2023, the firm filed an amended Form U5 disclosing that its internal review determined that Stanage had obtained a loan from a client without seeking firm approval.” The sanction further details, “On June 29, 2023, in connection with its investigation of the circumstances surrounding Stanage’s termination from Commonwealth Financial Network, FINRA sent a request to Stanage for the production of documents and information pursuant to FINRA Rule 8210. As stated during his phone call with FINRA on June 30, 2023, and by this agreement, Stanage acknowledges that he received FINRA’s request and will not produce the requested documents and information at any time.” The result was a bar from associating with any FINRA member in all capacities starting on July 10th, 2023.
For a copy of the FINRA Sanction, click here.
In addition, Billy Stanage Jr., was the subject of one other customer complaint, which includes the following:
- June 2023—“Customer alleged RR misrepresented a Universal Life policy as a Long Term Care policy and also knowingly arranged to have premiums, which she could not afford, paid from her investment account.” The damage amount requested was $96,000 and the customer dispute was denied.
For a copy of Billy Stanage Jr’s FINRA BrokerCheck, click here.
We Help Investors Recover Investment Losses
Pursuant to FINRA Rule 3270, outside business activities in which Financial Advisors become involved must be disclosed. This is in order to ensure that Financial Advisors do not engage in selling away. The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
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 email@example.com.