Merrill Lynch, Pierce, Fenner & Smith Incorporated Broker, John Gatto, Has Had Eight Customer Complaint Disclosures Alleging Sales Practice Misconduct
John Gatto (CRD # 1415454) is a Financial Advisor at Merrill Lynch, Pierce, Fenner & Smith Incorporated in Jericho, NY. John Gatto has been in the securities industry since 1986 and previously worked at Morgan Stanley, Citigroup Global Markets, Inc., and Lehman Brothers Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), John Gatto has been the subject of eight (8) customer complaints, alleging sales practice misconduct:
• September 2020—”The attorney for the customers allege failure to follow instructions from February 2020 until March 2020.” Alleged damages are $17,500 and the matter remains pending.
• September 2020—”The customer alleges failure to follow instructions on March 6, 2020.” Alleged damages are $400,000 and the matter remains pending.
• December 2011—”FINANCIAL ADVISOR ALLEGEDLY MISREPRESENTED THE YIELD AND SAFETY OF A BOND PURCHASED ON 10/14/2010.” The claim was denied.
• March 2005—”CLIENT ALLEGED GROSS NEGLIGENCE AND MISREPRESENTATION – 2000 TO 2005. DAMAGES UNSPECIFIED.” The claim was denied.
• July 2000—”CLIENT ALLEGED UNSUITABILITY & MISREPRESENTATION REGARDING A STOCK WHICH WAS PURCHASED MARCH, 2000. ALLEGED DAMAGES UNSPECIFIED.” The matter settled for $5,311.28.
• March 2000—”CLIENT ALLEGED THAT TWO UNIT INVESTMENT TRUSTS PURCHASED IN HIS ACCOUNT IN 1998 AND 1999 WERE UNSUITABLE.” The claim was denied.
• May 1995—”EXCESSIVE & UNSUITABLE TRADING, NEGLIGENT MISREPRESENTATION NEGLIGENT SUPERVISON, BREACH OF FIDUCIARY DUTY.” The matter was dismissed.
• March 1993—”FAILURE TO FOLLOW INSTRUCTIONS, BREACH OF FIDUCIARY DUTY, 10-B-5, NEGLIGENCE, BREACH OF CONTRACT, SEE ACT OF 1934 ALLEGED DAMAGES: $102,000.00.” The matter settled for $70,000.
For a copy of John Gratto’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 email@example.com.