- January 27, 2020
- First Standard Financial Company
Robert Spiegel (CRD # 5861656) was a Financial Advisor at First Allied Securities in Staten Island, New York. Robert Spiegel has been in the securities industry since since 2010 and previously worked at Alexander Capital.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on January 24, 2020, FINRA sanctioned Robert Spiegel, suspending him for a period of four months, fining him $5,000, and ordering restitution of $18,047. The FINRA sanction was based on allegations that Robert Spiegel engaged in excessive trading. Specifically, the FINRA sanction provided:
“During the Relevant Period, Spiegel engaged in quantitatively unsuitable trading in the account of customer JM, a 70-year old farmer. Spiegel recommended all of the trading in JM’s account, including executing a significant number of trades using margin, and JM followed his recommendations. As a result, Spiegel exercised de facto control over JM’s account. Spiegel’s trading of JM’s account resulted in a high turnover rate and cost-to-equity ratio, as well as significant losses. In particular, JM’s account exhibited an annualized turnover rate of 34 and an annualized cost-to-equity ratio of 113%. JM’s account incurred losses of $77,334 and IM paid $18,047 in commissions and fees. Spiegel’s trading in JM’s account was excessive and unsuitable given the customer’s investment profile.”
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2017052466302%20Robert%20F.%20Spiegel%20CRD%205861656%20AWC%20va.PDF.
FINRA has defined the standards in which investment recommendations made by brokerage firms and registered financial advisors are evaluated. The FINRA suitability rule focuses on three fundamental concepts: (1) reasonable basis suitability, (2) quantitative suitability, and (3) customer-specific suitability.
Excessive trading can be analyzed by looking at quantitative suitability measures. 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.
In addition to the FINRA sanction, Robert Spiegel has two disclosed customer complaints, alleging sales practice violations, including one pending complaint. In December 2018, a customer filed a complaint, alleging “churning and unsuitable trades.” The alleged damages are $90,198 and the matter remains pending.
In November 2016, a second client filed a complaint, alleging “churning and unsuitability during the period of September 2013 through March 2015”. The matter was settled for $231,000.
For a copy of Robert Spiegel’s CRD, click https://brokercheck.finra.org/individual/summary/5861656#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.
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