Financial Advisor Lawrence LaBine Subject of Forty-Four FINRA Disclosures

• November 18, 2024
• Newbridge Securities

Lawrence Michael Labine (CRD#: 1279935) was a previously registered broker and investment advisor.

 

Broker’s History

He entered the securities industry in 1985 and previously worked with Southmark Financial Services, Inc.; Anchor National Financial Services, Inc.; Sunamerica Securities, Inc.; Linsco/Private Ledger Corp; Associated Planners Investment Advisory; Dewaay Advisory; and Newbridge Financial Services Group, 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 April 2015, without admitting or denying the allegations, LaBine consented to the sanction and to the entry of findings that he willfully violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, Section 17(a) (1) of the Securities Act of 1933 (Securities Act) and FINRA Rules 2020 and 2010. The findings stated that that while associated with a member firm, LaBine sold senior debentures (Series D) issued by a company that developed software for real estate management companies and made fraudulent misrepresentations and omissions of material fact customers, in connection with the sale of Series D at the time of those sales, LaBine was receiving regular updates about the company’s poor financial condition from senior management at the company and the company’s lead investment banker, and had arranged to receive compensation and other valuable consideration from the company such as a seat on its board of directors – for meeting Series D fundraising targets he had arranged with the company. This information about the company’s perilous financial condition and LaBine’s personal incentive to sell Series D was material to Series D investors, yet LaBine failed to disclose it to these customers when he recommended series d to them.

 

The company ultimately filed for bankruptcy, however, LaBine made fraudulent misrepresentations and omissions of material fact to customers in connection with the sale of securities of an entity he had formed with others in an effort to acquire the assets of the company in bankruptcy. These fraudulent statements included, at least, that Series D investors who invested in the entity he formed would obtain the return of the principal they had invested in Series D. The findings also stated LaBine made unsuitable sales of non-traded real estate investment trusts (REITs) and other alternative investments, including Series D and his entity’s securities, to customers who were elderly and/or inexperienced investors. LaBine’s recommendations of Series D, his entity’s securities, REITs, and other alternative investments to the customers were unsuitable, given that the investments were illiquid, hard to value, complex and high risk. LaBine did not have a reasonable basis to believe the securities he recommended were suitable in light of the investment objectives these customers had communicated to LaBine and their overall financial circumstances, including net worth, income, risk tolerance and investment experience.

 

Three of these customers had limited financial means and two did not meet suitability standards specified in the prospectuses for the non-traded REITs that LaBine recommended and sold to them. LaBine earned high commissions from the sales of these securities to his customers. By reason of the above, in connection with Series D, his entity’s securities, and other investments, including non-traded REITs, LaBine made unsuitable recommendations to elderly and/or inexperienced customers. No findings were made regarding the allegations of making negligent misrepresentations and omissions of material facts to customers, and therefore failing to comply with Sections 17(a)(2) and (a)(3) of the Securities Act of 1933.

 

As a result, LaBine was barred from association with any FINRA member in any capacity.

 

For a copy of the FINRA Disciplinary Action Details, click here.

 

In addition, Lawrence Labine has been the subject of forty-three other FINRA disclosures, some of which include:

• November 2023—“BREACH OF FIDUCIARY DUTY, SUITABILITY, MISREPRESENTATIONS, BREACH OF CONTRACT, NEGLIGENCE AND FAILURE TO SUPERVISE.” The customer dispute settled for $125,000.
• April 2022—” Claimants alleges– Negligence, Breach of Fiduciary Duty, Breach of Contract, Negligent Supervision, Violation of Securities Laws, and Fraud.” The customer dispute settled for $10,750.
• March 2022—“Claimant alleges: Breach of Fiduciary Duty, Unsuitable Recommendations, Misrepresentation along with Breach of Contract and Omission of Material Fact.” The damage amount requested was $50,000 and the customer dispute settled for $33,000.
• July 2021—“ Claimant alleges: unsuitability, breach of contract, breach of fiduciary duty, negligence.” The customer dispute settled for $160,000.
• April 2021—“ failure to conduct due diligence, unsuitable, breach of fiduciary duty and misrepresentation.” The customer dispute settled for $30,000.
• April 2020— “NEGLIGENCE, BREACH OF FIDUCIARY DUTY, AND BREACH OF CONTRACT.” The customer dispute settled for $15,000.
• February 2020—“ CLAIMANT ALLEGES UNSUITABLE RECOMMENDATIONS, BREACH OF FIDUCIARY DUTY AND MATERIAL MISREPRESENTATION.” The damage amount requested was $200,000 and the customer dispute settled for $100,000.
• January 2020—”CLAIMANT ALLEGES BREACH OF FIDUCIARY DUTY, NEGLIGENCE AND BREACH OF CONTRACT..” The damage amount requested was $99,000 and the customer dispute settled for $175,000.

 

For a copy of Lawrence LaBine’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 mwolper@wolperlawfirm.com.