• November 28, 2022
• Aegis Capital Corp

Teresa Douberly (CRD#: 2477566) was previously registered as a Broker and Investment Advisor.

Broker’s Background

She entered the securities industry in 1994 and previously worked for Sagepoint Financial, Inc.; Aegis Capital Corp.; MetLife Securities, Inc.; VFinance Investments, Inc.; Commonwealth Financial Network; Hunter Scott Financial, LLC; Royal Alliance Associates, Inc.; Morgan Stanley DW, Inc.; JWGenesis Securities, Inc.; JW Charles Securities, Inc.; Jefferson-Pilot Investor Services, Inc.; and Prudential 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 October 2022, FINRA sanctioned Teresa Douberly, levying a civil and administrative penalty/fine of $5,000 and suspending her from a principal capacity for four months beginning November 7, 2022 and ending March 6, 2023. In addition, Douberly must attend and satisfactorily complete 20 hours of continuing education concerning supervisory responsibilities.

The FINRA sanction states, “Without admitting or denying the findings, Douberly consented to the sanctions and to the entry of findings that she failed to reasonably supervise recommendations to purchase variable interest rate structured products (VRSPs). The findings stated that Douberly was aware that two representatives recommended VRSPs, including steepeners, to customers. Nonetheless, Douberly did not take any steps to confirm whether the recommendations were suitable, such as reviewing the customers’ investment objectives and risk tolerances or speaking with the customers to confirm they understood the risks of VRSPs. Nor did Douberly complete an attestation form certifying that she reviewed the recommendations and confirmed they were suitable in light of the customers’ risk tolerances and investment objectives. In fact, the recommendations were not suitable for the customers given their investment objectives and risk tolerances. The customers suffered significant realized losses as a result of their VRSP positions, even after accounting for the income they earned from the investments.”

For a copy of the FINRA sanction, click here.

Teresa Douberly has no additional disciplinary history.

For a copy of Teresa Douberly’s FINRA BrokerCheck, click here.

We Help Investors Recover Investment Losses

In recent years, brokerage firms and Financial Advisors across the country have aggressively marketed and sold Steepener Notes, Adjustable Rate Market Notes, Spread Linked Notes and Structured Notes to retail customers.

Steepener Notes, Adjustable Rate Market Notes, and Spread Linked Notes are not traditional investments but rather structured products. During the first 12-24 months, the Steepener Notes, Adjustable Rate Market Notes, Spread Linked Notes and Structured Notes generally pay above-average “teaser” rates of interest. However, for each year thereafter until maturity, which can often be 15-20 years, the interest the interest rate is determined by a complex formula that is correlated to a stock index, such as the S&P 500, a fixed income index or a derivative benchmark such as the Constant Maturity Swap Rate, or CMS Swap rate. Depending on the value of the benchmark, the rate of interest paid to the investor may increase to a cap set forth in the prospectus or decrease to zero. These nuances are set forth in the prospectus of the Steepener Notes, Adjustable Rate Market Notes, Spread Linked Notes and Structured Notes but generally not understood by retail customers.

In addition, some Steepener Notes, Adjustable Rate Market Notes, and Spread Linked Notes have call features. This enables the issuer to call (or redeem) the security prior to maturity if, for example, the interest rate environment requires the issuer to pay higher than expected rates of interest to the investor. Alternatively, if the interest rate environment permits the payment of a lower rate of interest, the issuer is under no requirement to call the security. The call feature creates an imbalanced risk/return environment for the customer, who is often lured into the investment with the prospect of higher investment returns. In reality, to the extent a higher return is warranted pursuant to the prospectus, the issuer has the right to call the security if certain other conditions are met. This eliminates the possibility of the investor continuing to receive the higher income.

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, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis.  Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., 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.