- November 20, 2020
- LPL Financial
David Taddeo (CRD # 1163829) is a Financial Advisor at LPL Financial LLC in La Mesa, CA. David Taddeo has been in the securities industry since 1983 and previously worked at Financial Network Investment Corporation and American Pacific Securities Corporation.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), David Taddeo has been the subject of five (5) customer complaints, including three in 2020, alleging sales practice misconduct:
• July 2020—”CUSTOMER ALLEGED THAT TERMS OF VARIABLE ANNUITY INCOME BENEFIT WERE PRESENTED IN ERROR IN OCTOBER 2003, THAT INCOME WITHDRAWALS HAVE BEEN BASED ON THAT ERROR, AND REQUESTS THAT A SOLUTION BE PROVIDED. ACTIVITY PERIOD: 10/1/03 TO 7/29/20.”
• April 2020—”CUSTOMER ALLEGED THAT TERMS OF VARIABLE ANNUITY WERE MISREPREENTED AND SOUGHT DAMAGES OF APPROXIMATELY $800,000. ACTIVITY DATES – 6/1/07 TO 1/29/20.” The matter settled for $325,000.00.
• January 2020—”CUSTOMER ALLEGED THAT TERMS OF VARIABLE ANNUITY’S INCOME GUARANTEE WERE MISREPRESENTED AND SOUGHT UNSPECIFIED DAMAGES OF OVER $5,000. ACTIVITY PERIOD – 4/17/03 TO 2/1/19.” The matter settled for $289,625.00.
• February 2011—”CUSTOMER ALLEGES THAT REPRESENTATIVE PROVIDED UNSUITABLE INVESTMENT RECOMMENDATIONS AND MANAGEMENT OF TIGER CLAW II, LLC’S ADVISORY ACCOUNT ASSETS BEGINNING IN OCTOBER OF 2010, AND CONTINUING THROUGH FEBRUARY 2011, WHEN SHE CLOSED THE ADVISORY ACCOUNT. CUSTOMER FURTHER ALLEGES THAT SHE DID NOT UNDERSTAND THE ASSOCIATED MARKET RISKS OR LIQUIDITY RESTRICTIONS. REPRESENTATIVE DENIES ALL ALLEGATIONS AND MAINTAINS THAT ALL INVESTMENT RECOMMENDATIONS, SELECTIONS, AND MANAGEMENT OF THE TIGER CLAW II ACCOUNT WERE SUITABLE AND APPROPRIATE GIVEN THE BACKGROUND INFORMATION, INVESTMENT OBJECTIVES, RISK TOLERANCE AND INVESTMENT TIME HORIZON INFORMATION THAT CUSTOMER MADE KNOWN TO REPRESENTATIVE. REPRESENTATIVE FURTHER MAINTAINS THAT HE PROVIDED COMPLETE AND ACCURATE INFORMATION TO CUSTOMER IN CONNECTION WITH ALL INVESTMENTS AT ALL TIMES RELEVANT AND ON AN ONGOING BASIS, THAT ALL INVESTMENT MANAGEMENT AND GUIDANCE WAS INTENDED TO PROVIDE CUSTOMER WITH A WELL-POSITIONED INVESTMENT PORTFOLIO OVER TIME, AND THAT CUSTOMER ACKNOWLEDGED, UNDERSTOOD, ACCEPTED AND RATIFIED ALL INVESTMENT ALLOCATIONS AND ACTIVITY.” The claim was denied.
• June 2002—”CUSTOMERS ALLEGE THAT REPRESENTATIVE CAUSED AND/OR CONTRIBUTED TO DELAYS IN CLOSING AND TERMINATING THEIR PROFIT SHARING PLAN, IN LATE 2000 RESULTING IN MARKET LOSSES AND PENALITIES OF APPROXIMATELY $357,596. REPRESENTATIVE DENIES ALL ALLEGATIONS, AND MAINTAINS THAT HE ACTED IN A TIMELY AND APPROPRIATE MANNER IN ALL DEALINGS AND WITH REPSECT TO ALL TRANSACTIONS AND INSTRUCTIONS OF THE CUSTOMERS.” The matter settled for $115,000.00.
A variable annuity is complex hybrid financial and insurance product that offers investors a stream of income, tax deferment and a death benefit. The sub-accounts of an annuity are generally invested in mutual funds, the selection of which will dictate the potential performance of the annuity. While there are benefits of variable annuities, they are often outweighed by the risks and other features.
For example, variable annuities may include high annual management fees, surrender charges, lock-up periods, and mortality charges. In addition, it is commonly misunderstood that variable annuities offer guaranteed investment returns. They do not. Many financial advisors fail to disclose that investment returns may be impacted by market conditions.
Many financial advisors recommend annuities because they generate high sales commissions relative to other financial products. Unscrupulous financial advisors may also engage in annuity “switching,” which refers to the practice of selling one annuity and purchasing another. Often times the “switch” is justified by the financial advisor by suggesting that the annuity purchased has superior features when any such enhanced feature is actually outweighed by the cost of the “switch.”
For a copy of David Taddeo’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.