- December 13, 2020
- American Portfolio Services
Robert Halldin (CRD #1458098) was a Financial Advisor at American Portfolios Financial Services in Newington, Connecticut. Robert Halldin has been in the securities industry since 1986 and previously worked at Pacific West Securities and Bank of America Investment Services.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on December 3, 2020, Robert Halldin was barred by FINRA for failing to cooperate with an investigation into whether he engaged in selling away in customer accounts. According to the FINRA sanction: “Without admitting or denying the findings, Halldin consented to the sanction and to the entry of findings that he refused to appear for on-the-record testimony requested by FINRA as a part of an investigation that originated from its review of a series of Form U5 amendments filed by his former member firm. The findings stated that the Form U5s disclosed complaints and arbitrations filed against Halldin alleging that he traded securities in individuals’ brokerage accounts held away from the firm.”
This practice is known as selling away. The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
In addition to the foregoing, Robert Halldin has been the subject of three customer complaint disclosures since 2016, alleging sales practice misconduct. Among the complaints include the following:
• April 2019—”Breach of fiduciary duty, violation of Florida Securities Investor Protection Act, negligence, failure to supervise.” Alleged damages are $2.2 million and the matter remains pending.
• January 2018—”On or about 9/5/2014 until on or about 9/2017 the allegations are that the representative made unsuitable investments in accounts held away from the firm.” The matter was settled for $47,500.
• May 2016—”Churning, unsuitable investments, unauthorized trading , overconcentration.” The matter was settled for $400,000.
For a copy of Robert Halldin’s CRD, click https://brokercheck.finra.org/individual/summary/1458098#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
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 firstname.lastname@example.org.