- November 6, 2023
- First Southern
Elba Nogueras (CRD#:4459340) was a previously registered broker and investment advisor.
She entered the securities industry in 2002 and previously worked for First Southern, LLC; Kovack Securities Inc.; UBS Financial Services, Inc; UBS Financial Services Incorporated of Puerto Rico; and R-G Investments Corporation.
Allegations of Misconduct
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in September 2023, Without admitting or denying the findings, Nogueras consented to the sanctions and to the entry of findings that she willfully violated the Care Obligation of Rule 15l-1 under the Securities Exchange Act of 1934 (Reg BI) by recommending that her customer, a 52-year-old, invest in an illiquid, non-traded real estate investment trust (REIT) without having a reasonable basis to believe the investment was in the customer’s best interest. The findings stated that the prospectus cautioned that investments in the non-traded REIT involved a high degree of risk and could have resulted in a complete loss of principal. Based upon Nogueras’ recommendation, her customer invested $81,000, which represented 81 percent of the customer’s liquid net worth, in the non-traded REIT, resulting in Nogueras earning a commission of $5,670. Given the risk and illiquidity of investments in the non-traded REIT, Nogueras lacked a reasonable basis to believe her recommendation was in the best interest of the customer, who had a moderate risk tolerance and limited investment experience. The following sanctions were imposed: Civil and administrative penalties/fines in the amount of $5,000, disgorgement in the amount of $5,670, and a four-month suspension until January of 2024.
For a copy of the letter of acceptance, click here.
In addition, Elba Nogueras has been the subject of several other customer disputes, some of which include the following:
- April 2020—“Time frame: unspecified Allegations: Claimant alleges the recommendation to invest in and hold unsuitable concentration in Puerto Rico Closed-End Funds was misrepresented as safe and suitable.” The damage amount requested was $20,000. The customer dispute settled for $15,000.
- December 2019— “Time frame: Unspecified Claimants allege the recommendations to invest in and hold Puerto Rico Closed-End Bond Funds and Puerto Rico Government Bonds were unsuitable and that their accounts were unsuitably over-concentrated in those investments. Claimants also allege that the risk of concentration in Puerto Rico investments was misrepresented.” The customer dispute settled for $47,000.
- July 2019—“Time frame: Unspecified Claimants allege their investments in Puerto Rico closed-end funds and municipal bonds were unsuitable, over-concentrated, and misrepresented as safe investments.” The damage amount requested was $160,000, and the customer dispute settled for $72,250.
- June 2018—“Time frame: unspecified Allegations: Claimants allege misrepresentations, unsuitability, and over-concentration concerning their investments in Puerto Rico closed-end funds and municipal bonds.” The customer dispute settled for $120,000.
- August 2017—“Claimants allege that they were damaged as a result of unsuitable and materially misleading investment advice given by UBS concerning: (1) unsuitable overconcentration of their brokerage accounts into UBS PR’s proprietary closed-end funds and Puerto Rican municipal bonds; (2) misleading advice and risk disclosure failures concerning the closed-end funds and municipal bonds; and (3) failing to properly and suitably advise them when the closed-end funds and Puerto Rican municipal bonds became too risky for them due to credit and economic deteriorations in Puerto Rico.” The customer dispute settled for $75,000.
- February 2016—“Time Frame: 2008-2015 Claimant alleges unsuitability, overconcentration, and misrepresentations involving the recommendation of a Puerto Rico closed-end funds.” The customer dispute settled for $175,000.
- November 2015—“Time Frame: not stated Claimant alleges unsuitability, overconcentration, and misrepresentations involving recommendation of closed-end funds.” The damage amount requested was $150,000, and the customer dispute settled for $90,000.
- October 2015—“Claimants allege unsuitability involving the recommendation to purchase Puerto Rico Conservation Trust Fund Notes. Time Frame: unspecified.” The customer dispute settled for $18,000.
For a copy of Elba Noguera’s FINRA BrokerCheck, Click here.
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 email@example.com.