- October 7, 2018
- LPL Financial
Donald Woods aka Don Woods (CRD # 727894) was a Financial Advisor at Thurston Springer Financial in Louisville, KY. Donald Woods aka Don Woods has been in the securities industry since 1981and previously worked at LPL Financial, LLC.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), Donald Woods aka Don Woods has eleven disclosed customer complaints, alleging sales practice violations since 2016. Among the customer complaints against Frank Avallone include the following:
• October 2019—”CLAIMANTS ALLEGE THEY DESIRED TO PURCHASE LOW-RISK INVESTMENTS, BUT WERE ENCOURAGED TO INVEST IN RISKY BUSINESS DEVELOPMENT COMPANIES AND REITS THROUGH ONGOING MISREPRESENTATIONS, WHICH CAUSED THEM MONETARY LOSSES. THEY FURTHER ALLEGE LOSSES IN CONNECTION WITH A VARIABLE ANNUITY. THEY ALSO ALLEGE LPL FAILED TO ADEQUATELY SUPERVISE CLAIMANTS’ REPRESENTATIVES.” The alleged damages are $140,000 and the matter remains pending.
• June 2019—”CUSTOMERS ALLEGE THROUGH COUNSEL FAILURE TO DISCLOSE RISKS AND FEES ASSOCIATED WITH ANNUITY PURCHASES, AND MISREPRESENTATION AND UNSUITABLE RECOMMENDATION WITH RESPECT TO ALTERNATIVE INVESTMENTS.” Alleged damages are unspecified.
• February 2019—”CUSTOMERS ALLEGE THROUGH COUNSEL MISREPRESENTATION AND UNSUITABLE IN CONNECTION WITH ALTERNATIVE INVESTMENTS.” The alleged damages are $350,000.
• March 2019—”CUSTOMERS ALLEGE MISREPRESENTATION AND UNSUITABLE RECOMMENDATIONS IN CONNECTION WITH ALTERNATIVE INVESTMENT PURCHASES.” Alleged damages are unspecified.
• August 2018—”CUSTOMER ALLEGES EXCESSIVE SELLING OF VARIABLE ANNUITIES, MISREPRESENTING OR FAILING TO DISCLOSE MATERIAL FACTS, UNSUITABILITY OF PRODUCTS AND ALTERATION OF ACCOUNT PROFILES.” The matter was settled for $61,852.
• March 2018—”Loss of opportunity due to uninvested funds. Market losses. Undisclosed fees. Misrepresentation of fees. Altered documents. Unsuitable investments.” The matter was settled for $17,500
• May 2018—”Unsuitable investments, unwarranted fees, failure to invest funds.” The matter was settlked for $96,480.
A For a full copy of Donald Woods aka Don Woods’ FINRA disclosure report, click https://brokercheck.finra.org/individual/summary/727894#disclosuresSection.
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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