Former Financial Advisor Stephen Swensen The Subject of Two Million Dollar Settlements

• June 26, 2025
• Allegis Investment

Stephen Swensen (CRD#: 2885578) was a previously registered broker and investment advisor.

Broker’s History

He entered the securities industry in 1997 and previously worked with Robert W. Baird & Co. Incorporated; Northwestern Mutual Investment Services; Park Avenue Securities LLC; Securian Financial Services, Inc.; Commonwealth Financial Network; Summit Brokerage Services, Inc.; Allegis Investment Services, LLC; J.W. Cole Financial, 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 February of 2024, Stephen Swensen became the subject of a customer dispute that made, “allegations against the Firm by claimants for failing to detect an alleged fraud operated away from the Firm, perpetrated by the former representative, who was affiliated with the Firm for less than two months, outside the scope of his activities with the Firm, regarding investments Claimants made with the representative after he left the Firm.” The damage amount requested was $14,400,000.00 and the customer dispute settled for $1,650,000.00.

In addition, Stephen Swensen was the subject of four other FINRA disclosures, including:

• Feb 2024—“ Allegations against the Firm by claimants for failing to detect an alleged fraud operated away from the Firm, perpetrated by the former representative, who was affiliated with the Firm for less than two months, outside the scope of his activities with the Firm, regarding investments Claimants made with the representative after he left the Firm.” The damage amount requested was $7,100,000.00 and the customer dispute settled for $1,650,000.00.
• May 2023—“ Allegations against the Firm for failing to detect an alleged fraud operated away from the Firm by a deceased representative that was with the Firm for less than two months. Claimants invested with the other representative at various times while he was affiliated with differing firms. Claimants allege Registered Representative was indirectly involved.” The damage amount requested was $15,000,000.00 and the customer dispute was withdrawn.
• April 2023—“ Allegations against the Firm by claimants for failing to detect an alleged fraud operated away from the Firm, perpetrated by the former representative, who was affiliated with the Firm for less than two months, outside the scope of his activities with the Firm, regarding investments Claimants made with the representative after he left the Firm.” The damage amount requested was $850,000.00 and the customer dispute settled for $55,000.00.
• June 2022— Discharged by Wealth Navigation Advisors, “Failure to disclose outside business activity.”

For a copy of Stephen Swensen’s FINRA BrokerCheck, click here.

We Help Investors Recover Investment Losses

Pursuant to FINRA Rule 3270, outside business activities in which Financial Advisors become involved must be disclosed.  FINRA Rule 3280 prohibits Financial Advisors from engaging in Private Securities Transactions, which are securities transactions that take place away from the employing brokerage firm.  The purpose of these rules is to ensure that Financial Advisors do not engage in 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.

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.

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.