Former Next Financial Group, Inc. Broker, Brian Radoo, Barred By FINRA Following an Investigation Involving His Alleged Involvement In Outside Business Activities
Brian Radoo (CRD # 2558458) was a Financial Advisor at Next Financial Group, Inc. in North Woodmere, NY. Brian Radoo has been in the securities industry since 1994 and previously worked at Union Capital Company, Chase Investment Services Corp., HSBC, Citicorp Investment Services, Chase investment Services Corp., and Chemical Investment Services Corp.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on December 18, 2020, Brian Radoo was barred by FINRA for failing to cooperate with an investigation into whether he engaged in an unapproved outside business activity. According to the FINRA sanction: “Without admitting or denying the findings, Radoo consented to the sanction and to the entry of findings that he refused to provide information and documents requested by FINRA in connection with an investigation into whether he engaged in an undisclosed outside business activity. The findings stated that Radoo acknowledged that he received FINRA’s request and will not produce the requested information or documents at any time.”
For a copy of the FINRA sanction, click here
In addition to the foregoing, Brian Radoo has been the subject of six customer complaint disclosures since 2000, alleging sales practice misconduct. Among the complaints include the following:
• April 2020—”Claimant’s former Registered Representative Brian Radoo offered them an investment in an unapproved outside business activity that involved a “cannabis cultivation” company. Claimant states that the firm, failed to supervise the representative’s outside business activity. [REDACTED] alleged investment was in 2018 and [REDACTED] was in 2017.” The matter remains pending.
• September 2008—”CLIENT ALLEGES FAILURE TO FOLLOW INSTRUCTIONS RELATING TO A MANAGED ACCOUNT.” The matter was denied.
• August 2008—”CLIENT ALLEGES AN UNSUITABLE RECOMMENDATION AND MISREPRESENTATION RELATING TO THE LIQUIDITY OF AN AUCTION RATE SECURITY. CLIENT HAS REQUESTED THE RETURN OF THEIR INVESTMENT.” The matter was denied.
• April 2008—”CLIENT VERBALLY COMPLAINED THAT THE UIT PURCHASED WAS UNSUITABLE.” The matter settled for $220,000.
• October 2005—”CUSTOMER CLAIMS THAT HE WAS LOOKING FOR A PARTICULAR INTEREST RATE, CLOSE TO 3%, FOR A SHORT-TERM LIQUID INVESTMENT AND WAS NOT SOLD A PRODUCT SUITABLE TO HIS OBJECTIVES.” The matter settled for $13,178.00.
• March 2000—”CUSTOMER ALLEGES FIXED ANNUITY PURCHASED WAS UNSUITABLE AND AN ADDITIONAL INVESTMENT INTO SAME ANNUITY WAS UNAUTHORIZED.” The matter was denied.
On December 5, 2019, Brian Radoo was discharged from Next Financial Group, Inc. following allegations he “participated in unreported, unapproved outside business activities.”
Often times, Financial Advisors who participate in private securities transactions are said to be “selling away.” 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.
On February 13, 2008, Brian Radoo was discharged from Chase Investment Serivces Corporation following allegations he “falsifired the location where and annuity document was signed.”
For a copy of Brian Radoo’s CRD, 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.
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:
• Other investments
• Financial situation and needs
• Tax status
• Investment objectives
• Time horizon
• Liquidity needs
• Risk tolerance
• Any other information disclosed by the customer
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 firstname.lastname@example.org.
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