Woodbury Financial Services Settled Customer Theft Claim Involving Former Broker, Raymond Ferro, For $1.56 Million
Raymond Ferro, Jr. aka Ray Ferro (CRD # 1927831) was a Financial Advisor at Woodbury Financial Services in Danbury, Connecticut. Raymond Ferro, Jr. aka Ray Ferro began in the securities industry since 1997 and previously worked at NEXT Financial Group and LPL Financial Corp.
The Wolper Law Firm has been retained by clients, who were victims of theft by Ray Ferro, dating back to when he was a Financial Advisor at NEXT Financial Group and Woodbury Financial Services. Ray Ferro allegedly stole hundreds of thousands of dollars from the client over the course of many years.
Separately, the Wolper Law Firm is also representing clients of Raymond Ferro, Jr. aka Ray Ferro, who alleged that they were improperly recommended to sell whole life insurance and variable annuity products they had owned for many years and purchase new (supposedly better) variable universal insurance policies and annuity products. The former clients of Raymond Ferro, Jr. aka Ray Ferro allege that the new insurance and annuity products do not provide better income or death benefits and are subject to more market volatility.
Insurance and annuity products are high commission products, which often drives investment recommendations by Financial Advisors. Commissions on annuity products can be as high as 6% in year-one, followed by trailing commissions in each year thereafter. Commissions on insurance products can be equal to a substantial percentage of the first-year premium followed by trailing comminssions in each year thereafter.
In addition, according to publicly available records released by the Financial Industry Regulatory Authority (FINRA), Raymond Ferro, Jr. aka Ray Ferro has been the subject of two (2) customer complaints during his career, alleging sales practice misconduct, including a pending complaint regarding alleged theft from a customer account. According to the pending complaint, which was filed in February 2020, “the client alleges the financial professional wrongfully transferred $330,000 from the client’s bank account to his own bank account.” The matter was recently settled for $1.56 million.
In 2003, Raymond Ferro, Jr. aka Ray Ferro was the subject of a second customer complaint, alleging “unsuitable investments.” This dispute was settled for $14,250.
For a copy of Raymond Ferro, Jr. aka Ray Ferro’s CRD, click https://brokercheck.finra.org/individual/summary/1927831
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.