- August 11, 2020
- David A Noyes & Co.
Stuart Pearl (CRD # 1500833) has been in the secutities industry since 1986. Stuart Pearl was registered broker with David A Noyes & Company in Indianapolis, IN from 2015-2019. Stuart Pearl also worked for Ameriprise Financial Services, Inc (2010-2015), Morgan Stanley Smith Barney (2009-2010), and Citigroup Global Markets Inc. (2001-2009) in Deerfield, IL.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), Stuart Pearl has been the subject of five (5) customer complaints during his career, including a pending complaint for $2 million. Among the complaints allege the following:
• May 2020—”Customers allege that the representative had created a margin trading account without discussing with them.” Alleged damages are $2,088,124.00 and the matter remains pending.
• March 2019—“Registered representative put on a large hedge position in customer’s account without the customer’s knowledge.” The matter settled for $42,500.00.
• February 2013—”ALLEGATIONS AGAINST MORGAN STANLEY – CLAIMANT ALLEGES, INTER ALIA, THAT FROM 2004 THROUGH 2010 THE FINANCIAL ADVISOR BOUGHT AND SOLD INVESTMENTS WITHOUT FIRST CONSULTING THE CLAIMANT, EXERCISING DE FACTO DISCRETIONARY CONTROL OVER HER ACCOUNT. ALLEGATIONS AGAINST AMERIPRISE – CLAIMANT ALLEGES THAT SINCE 2004, RESPONDENTS OVER TRADED AND HEAVILY MARGINED HER ACCOUNTS AND RECOMMENDED UNSUITABLE INVESTMENTS. CLAIMANT SEEKS $300,000 IN DAMAGES, FILING FEES, ATTORNEY’S FEES AND COSTS.” The matter settled for $95,500.00.
• May 2012—”THE CLIENTS ALLEGED UNAUTHORIZED TRADING AND USE OF MARGIN BORROWING OCCURRED FROM JULY 2010 THROUGH MAY 2012.” The matter settled for $55,000.00.
• December 2002—”BREACH OF FIDUCIARY DUTY, NEGLIGENCE, BREACH OF DUTY OF GOOD FAITH AND FAIR DEALING, VIOLATION OF NASD & NYSE RULES, BREACH OF CONTRACT, RICO VIOLATIONS. 6/5/01-11/18/02.” The matter settled for $60,000.00.
In addition to the customer complaint disclosures Stuart Pearl has two employment separations after allegations. In March 2019 Stuart Pearl resigned from David A. Noyes & Company. According to FINRA “Stuart Pearl resigned while on heightened supervision. He had not followed his heightened supervision plan and would have been terminated had he not resigned.”
In June of 2015 Stuart Pearl was discharged from Ameriprise Financial Services, Inc. According to FINRA Stuart Pearl “WAS SUSPENDED ON JUNE 22, 2015 AND SUBSEQUENTLY TERMINATED ON JUNE 30, 2015 FOR COMPANY POLICY VIOLATIONS RELATED TO: THE USE OF DISCRETION IN NON-DISCRETIONARY ACCOUNTS AND COMPLYING WITH SUPERVISION.”
For a copy of Stuart Pearl’s CRD, click https://brokercheck.finra.org/individual/summary/1500833#disclosuresSection
In 2017 Stuart Pearl was the subject of a FINRA regulatory matter. According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), Stuart Pearl was sanctioned by FINRA, suspending him for a period of 45 days and fining him $7,500. According to the FINRA sanction:
“Without admitting or denying the findings, Pearl consented to the sanctions and to the entry of findings that he effected securities transactions in a customer’s account on several occasions on a discretionary basis without prior written authorization from the customer and without prior written acceptance of the account as discretionary from his member firm. The findings stated that on May 14, 2015, Pearl used discretion to liquidate positions in six different securities with a total principal amount of approximately $20,000, on behalf of the customer, a senior investor. Although the customer had authorized Pearl to execute these liquidations in discussions that took place prior to May 14, 2015, Pearl failed to speak with the customer again on May 14, 2015, to confirm the customer’s authorization to make these sales. The findings also stated that Pearl made unsuitable recommendations in two other customers’ joint brokerage account when he recommended the customers use margin to effect several trades. The recommendations made by Pearl to purchase securities on margin were unsuitable in light of the customers’ investment objectives, risk tolerances, and their financial situation and needs. As a result of those purchases, the customers experienced a significant increase in their margin debt balances in relation to their available funds and their account was subject to seven margin calls during the relevant period.”
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2015046329201%20STUART%20L.%20PEARL%20CRD%20.1500833%20AWC%20JM%20REDACTED%20%282019-1563281361932%29.pdf
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.