- August 11, 2020
- Peachcap Securities
Aaron Brodt (CRD # 5017914) is a former Financial Advisor at Peachcap Securities in Scottsdale, AZ. Aaron Brodt has been in the secutities industry since 2008 and previously worked at Meridian United Cappital, LLC and Accelerated Capital Group (expelled by FINRA) in Scottsdale, AZ.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), Aaron Brodt was the subject of five (5) customer complaints, alleging sales practice misconduct:
• January 2020—”Claimants allege failure to perform due diligence and sales practice violations in regard to the purchase of two securities in 2013.” Alleged damages are $430,000 and the matter remains pending.
• May 2017—”Claimants allege against the employing firm, by name, and against their adviser, by reference, negligence, gross negligence, misrepresentation/omission, failure to supervise, breach of fiduciary duty, breach of contract and control person liability in connection with the 2014-2015 purchase of four investments for a total of $340,000. One of the investments was sold at a profit, while the other three are unrealized losses in an unspecified amount.” The matter settled for $95,000.
• April 2016—”Through letter from their attorney, clients allege Mr. Brodt recommended an unsuitable investment which they purchased in May and October of 2015.” The matter settled for $116,667.
• April 2016—”Through a letter from her attorney, client alleges Mr. Brodt recommended an unsuitable investment which she purchased in May 2015.” The matter settled for $58,333.
• March 2016—”The client expressed displeasure regarding his portfolio and the investments within.” The matter was closed without action.
For a copy of Aaron Brodt’s CRD, click https://brokercheck.finra.org/individual/summary/5017914#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.
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, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., 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.