- February 13, 2021
- LPL Financial
James Couture (CRD#: 4406284) was an Investment Advisor at LPL Financial, LLC in Worcester, MA. He entered the securities industry in 2001 and previously worked for Lincoln Financial Securities Corporation; New England Securities; and Morgan Stanley DW, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in October 2020, FINRA sanctioned James Couture, barring him from all capacities indefinitely as of October 21, 2020.
The FINRA sanction states, “Without admitting or denying the findings, Couture consented to the sanction and to the entry of findings that he refused to produce all of the information and documents requested by FINRA in connection with its investigation into the allegations that formed the basis of his termination from his member firm. The findings stated that Couture’s firm submitted a Form U5 terminating his registration and alleging that he altered identifying information, account balances and distributions in customer account statements; maintained commingled customer funds; and used an unapproved email address. Initially FINRA received a response to its requests from Couture, however his production was substantially incomplete. Subsequently, Couture decided to cease complying with FINRA’s requests.”
For a copy of the FINRA sanction, click here.
In addition, James Couture has been the subject of customer complaints, including the following:
• October 2020—“MISREPRESENTATION. ACTIVITY PERIOD: 4/21/20 TO 10/20/20.” The complaint was denied by FINRA.
• October 2020—LPL Financial, LLC discharged James Couture after allegations that included “Altered identifying information, account balances and distributions in customer account statement; maintained comingled customer funds; use of an unapproved email address.”
For a copy of James Couture’s FINRA BrokerCheck, click here.
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.
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.
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, other investments, financial situation and needs, tax status, and investment objectives. Other considerations include the customer’s time horizon, liquidity needs, risk tolerance, and any other information disclosed by the customer.
Failure by a financial advisor to adhere to these requirements is evidence of negligence or, worse, investment fraud. If you as the investor can establish, at a minimum, negligent misconduct, you may be entitled to recover your investment losses.
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