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Lang Phu Nguyen, Investment Advisor at Cetera Advisors LLC, Suspended and Fined for Exercising Discretion Without Authorization

Lang Phu Nguyen (CRD#: 6526189) was an Investment Advisor at Cetera Advisors LLC in Algonquin, IL. He entered the securities industry in 2015 and previously worked for Edward Jones.

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in March 2021, FINRA sanctioned Lang Phu Nguyen with a 45-day suspension and a civil and administrative penalty of $5,000. The FINRA sanction states, “Without admitting or denying the findings, Nguyen consented to the sanctions and to the entry of findings that he exercised discretion without prior written authorization from his customers or approval from the member firm in customer accounts. The findings stated that although the customers verbally authorized Nguyen to exercise discretion in their accounts, they did not provide prior written authorization. Moreover, the firm never approved any of the accounts for discretionary trading. The findings also stated that Nguyen failed to safeguard customer confidential information. With customer consent, Nguyen used his personal cell phone to photograph confidential customer information, such as driver’s licenses, account statements and numbers, signed account documents, social security cards, addresses, and telephone numbers. He then used his personal email address to transmit the images of confidential materials to his firm email account. Using a personal device to photograph confidential customer information and a personal email address to transmit that information to a firm email address in contravention of firm policy and is inconsistent with a registered representative’s obligation under FINRA Rule 2010.”

Unauthorized trading is strictly prohibited by FINRA rules. Before a transaction can be entered in a customer account, the Financial Advisor must first obtain verbal or written authorization from the client. In the absence of authorization, the transaction is subject to rescission by the customer.

For a copy of the FINRA sanction, click here.

In addition, Lang Phu Nguyen has been the subject of one disclosure, outlined as follows:

● December 2018 “Concerns that registered representative did not comply with the firm’s email policy.” Lang Phu Nguyen was discharged from Edward Jones.

For a copy of Lang Phu Nguyen’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.

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 mwolper@wolperlawfirm.com.

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