- July 10, 2021
- Insight Securities Inc
Carlos Legaspy (CRD#: 2148751) is a dually registered Broker and Investment Advisor at Insight Securities, Inc., in Highland Park, IL. He entered the securities industry in 1991 and previously worked for Precise Investment Management, LLC; Investment Placement Group; and Serfin Securities, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in March 2021, a customer dispute was filed against Carlos Legaspy. The allegation states, “Claimants are all managed by a 3rd party outside advisor in no way related to Carlos Legaspy or Insight. Claimants allege that the third party investment advisor was selling them securities that would later be deemed worthless. Claimants allege that Carlos Legaspy, as the service broker on their accounts, should have been aware that these securities may turn out to be worthless despite being priced and current. Claimants also allege that Legaspy and Insight should have conducted further due diligence to identify that some of the outside investment advisors had previously been associated with a firm that was subject to an SEC investigation.” Damages of $1M are requested. The customer dispute is pending.
In addition, Carlos Legaspy has been the subject of four customer complaints, including one that remains pending, including the following:
● October 2019–”Client is managed by a 3rd party advisor (unrelated to Insight) with discretion on the account. Client opened account with Insight 4th quarter of 2016 and transferred in one security. Client’s Advisor with discretion sold single security and purchased a different security in April of 2017. Approximately a year and a half later, that purchased security lost all value. Client alleges that Insight and Mr. Legaspy actively participated in selling of worthless securities. Insight has since cancelled that single trade and replaced with original security that client transferred in from Raymond James. Carlos Legaspy has never managed nor directed activity in this account.” Damages of $500,000 are sought; the customer complaint is pending.
● February 2019–”Clients were managed by third party advisors. In Oct of 2018 Client alleges that the transfer documents were fraudulent and that Insight Securities, Mr Legaspy and Pershing LLC were negligent in missing the red flags of this transfer. Also alleges part of client funds invested in worthless notes.” The customer dispute was settled for $810,000.
● January 2019–”Clients were managed by third party advisors. In March of 2018 LOAs were submitted to transfer assets to another bank. Client alleges that the transfer documents were fraudulent and that Insight Securities, Mr Legaspy and Pershing LLC were negligent in missing the red flags of this transfer.” The customer complaint was settled for $572,353.
● August 2018–”Clients were managed by third party advisors. On March 15th, 2018 an LOA was submitted to transfer assets to another bank. Client alleges that the transfer documents were fraudulent and that Insight Securities, Mr. Legaspy, Pershing LLC, and Deutsche Bank were negligent in missing the red flags of this transfer.” The customer dispute was settled for $227,647.
For a copy of Carlos Legaspy’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.
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, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.
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.