Former Financial Advisor Scott Taubman Suspended by FINRA

• August 20, 2024
• Ameriprise Financial Services

Scott Willard Taubman (CRD#: 4809824) was a previously registered broker and investment advisor.

Broker’s History

He entered the securities industry in 2004 and previously worked with Morgan Stanley DW Inc.; First Financial Equity Corporation; AllState Financial Services, LLC; and Ameriprise Financial Services, LLC.

Current and Past Allegations of Conduct Leading to Investment Loss

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in July 2024, without admitting or denying the findings, Taubman consented to the sanction and to the entry of findings that he borrowed $62,500 from two senior customers, without prior notice to or written approval from his member firm. The findings stated that the terms of the loans were not documented. The customers were not immediate family members or a financial institution. Taubman firm learned of the loans and conducted an investigation, during which Taubman confirmed that he had received, in total, approximately $100,000 from the customers. Taubman did not repay the loans. When Taubman filed a Chapter 7 bankruptcy petition, he disclosed the debt as a personal loan, and he obtained a discharge of his indebtedness. The findings also stated that Taubman falsely attested in his annual compliance questionnaires that he was in compliance with his firm’s policies and procedures. As a result, he consented to the imposition of the following sanction:
• A four-month suspension from associating with any FINRA member in all capacities.

For a copy of the Disciplinary Action Details, click here.

In addition, Scott Taubman has been the subject of six other FINRA disclosures:
• December 2023—“ Customer alleges the variable annuity recommended by the RR was unsuitable and was not in the customer’s best interest.” The customer dispute is still pending.
• September 2022—Permitted to Resign from Ameriprise Financial Services, LLC, “ Violations of company policy associated with receiving a loan from a client and an undisclosed judgement.”
• September 2022—Bankruptcy, “ Discharged.”
• November 2020—“ Civil Judgment/Lien- $8793.00.”
• January 2018—“ Tax Judgment/Lien – $34,300.67.”
• June 2017—“ Tax Judgment/Lien- #256,048.79.”

For a copy of Scott Taubman’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.

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.

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.
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.