• May 29, 2024
• Pruco Securities

James P. Pelletiere (CRD#: 2628708) is a previously registered broker.

 

Broker’s Background

He entered the securities industry in 1998 and previously worked with NYLife Securities, Inc.; Park Avenue Securities, LLC; MML Investors Securities, LLC; and Pruco Securities, LLC.

 

Current and Past Allegations of Conduct Leading to Investment Loss

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in April 2024, James Pelletiere became the subject of a customer dispute alleging, “the rep forced her to purchase a policy with a premium higher than she felt comfortable with and came to her place of work to give her cash to pay the first two months’ premium. He later advised her that she could reduce the monthly payment which caused the policy to go into default.” The damage amount requested is $10,050.00 and the customer dispute is still pending.

 

In addition, James Pelletiere has been the subject of three other disclosures:

• March 2024— “The complainants allege that, beginning in or around 2017, the signatures on documents related to fixed annuity and life insurance policies were not genuine.” The customer dispute is still pending.

 

• October 2023— Barred by FINRA: “ Without admitting or denying the findings, Pelletiere consented to the sanction and to the entry of finding that he refused to provide information and documents requested by FINRA in connection with its investigation into whether Pelletiere had, among other things, misused customer funds and accepted cash payments from a client.” For a copy of the disciplinary action details, click here.

 

• December 2022— “Customer Alleges that the rep did not fully disclose all the facts regarding churning of policies and fees.” The damage amount requested was $146,268.53, and the customer dispute settled for $148,532.53.

 

 

For a copy of James Pelletiere’s FINRA BrokerCheck, click here.

 

 

We Help Investors Recover Investment Losses

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.

 

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.

 

FINRA regulations require that a customer’s written authorization is required before a broker-dealer can carry out transactions in the customer’s account. In addition, the broker-dealer’s member firm needs to approve the broker-dealer’s authorization. These measures are intended to protect the customer. Discretionary trading allows the broker-dealer to unilaterally decide to buy or sell securities at any price and not have to check with the client first. Exercising discretion without authorization can be costly to investors, and broker-dealers and their member firms, too.

 

FINRA Rule 2150 specifically addresses theft and conversion in a customer account, stating “no member or person associated with a member shall make improper use of a customer’s securities or funds.”  This rule includes any “guarantee” that brokers make to customers in relation to losses incurred in a brokerage account.

 

In addition, FINRA Rule 3240 strictly prohibits a financial advisor from borrowing money from a client absent from unique circumstances, such as a familial relationship between the Financial Advisor and the client.  There is also an exception if the client is a financial institution regularly engaged in the business of lending.  The reason for this prohibition is clear—borrowing money from clients creates an immediate conflict of interest and can potentially lead to theft or conversion of client assets.

Excessive trading often occurs when a Financial Advisor puts his or her interests ahead of the clients and makes transactions solely for the purpose of generating commissions. Financial Advisors have a regulatory duty to recommend suitable investment strategies. One of the components of the suitability analysis is quantitative suitability.

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. 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.

 

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.