- April 29, 2024
- Saxony Securities
Peter Frederick Reinecke (CRD#: 2085940) is a previously registered Broker and Investment Advisor.
Broker’s Background
He entered the securities industry in 1990, and previously worked with Cigna Financial Advisors, Inc.; LPL Financial LLC; and Saxony 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), January 2024, Peter Reinecke became the subject of a customer dispute alleging, “Risky and speculative private placement investments, fraud and negligence.” The damage amount requested is $13,000,000 and the customer dispute is still pending.
In addition, Peter Reinecke was the subject of one other customer dispute:
- March 2022—“ Claimants allege that during the time period 2010 to 2021, representative made misrepresentations and omissions which caused a majority of their assets to be concentrated in speculative and illiquid private companies. Claimants also allege representative borrowed money from Claimants, and that representative had a personal interest in the private companies where representative invested Claimants’ funds.” The customer dispute settled for $495,000.00.
For a copy of Peter Reinecke’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.
FINRA Rule 2150 specifically addresses theft and conversion in a customer account, stating “no member or person associated with a member shall make improper use of a customer’s securities or funds.” This rule includes any “guarantee” that brokers make to customers in relation to losses incurred in a brokerage account.
In addition, FINRA Rule 3240 strictly prohibits a financial advisor from borrowing money from a client absent from unique circumstances, such as a familial relationship between the Financial Advisor and the client. There is also an exception if the client is a financial institution regularly engaged in the business of lending. The reason for this prohibition is clear—borrowing money from clients creates an immediate conflict of interest and can potentially lead to theft or conversion of client assets.
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.