Financial Advisor Mark Katz has been the Subject of Four Customer Complaints

• August 27, 2024
• Western International Securities

Mark Katz (CRD#: 3055019) is a registered broker and investment advisor with Western International Securities, Inc., in Pasadena, CA.

Broker’s History

He entered the securities industry in 1998 and previously worked with Fortress Financial Group, LTD.; M.L Stern & Co., LLC; and Hilltop 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 February of 2024, Mark Katz became the subject of a customer dispute alleging, “transactions in fixed income securities were not authorized and inappropriate that created losses in his accounts in 2023.” The damage amount requested was $358,162.96 and the customer dispute settled for $172,373.30.
In addition, Mark Katz has been the subject of three other customer disputes:
• February 2020—“Unsuitable, unauthorized trading, misrepresentation, excessive trading, breach of fiduciary duty, self dealing, financial exploitation.” The customer dispute was denied.
• February 2020—“Unsuitable recommendations, poor performance, fiduciary violation, misrepresentation.” The damage amount requested was $50,000 and the customer dispute settled for $75,000.
• August 2016—“Customer’s son claiming to have POA submitted a written complaint alleging that the recommendation to purchase the Mainstay Cushing Energy Income Fund was unsuitable, details of the investment were misrepresented (not disclosed) and the representative took advantage of the customer’s diminished capacity (under the influence of medication). POA request restitution for losses incurred due to this recommendation. At the time that the initial letter was received, the Firm had no evidence that the POA was authorized to act on behalf of the customer. This matter was re-opened upon receipt and acceptance of a power-of-attorney document granting the customer’s son POA on August 5, 2016.” The customer dispute was denied.

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.
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.

FINRA regulations require that a customer’s written authorization is required before a broker-dealer can carry out transactions in the customer’s account. In addition, the broker-dealer’s member firm needs to approve the broker-dealer’s authorization. These measures are intended to protect the customer. Discretionary trading allows the broker-dealer to unilaterally decide to buy or sell securities at any price and not have to check with the client first. Exercising discretion without authorization can be costly to investors, and broker-dealers and their member firms, too.

Excessive trading often occurs when a Financial Advisor puts his or her interests ahead of the clients and makes transactions solely for the purpose of generating commissions. Financial Advisors have a regulatory duty to recommend suitable investment strategies. One of the components of the suitability analysis is quantitative suitability.

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. 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.

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.