- September 14, 2021
- Aegis Capital Corp
Scott Hananel (CRD#: 3080827) is a previously registered Broker. He entered the securities industry in 1999 and previously worked for Aegis Capital Corp.; Gunnallen Financial, Inc.; Milestone Group Management, LLC; Salomon Grey Financial Corporation; and Royal Hutton Securities Corp.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in February 2021, a customer dispute was filed against Scott Hananel. The allegations state, “Time frame: unspecified. Claimants allege unsuitable investments.” The customer complaint remains pending.
In addition, Scott Hananel has been the subject of five customer complaints, including two that remain pending, including the following:
● January 2021—”Time frame: Unspecified. Claimant alleges breach of contract, breach of fiduciary duty, and unsuitable investment recommendations.” The customer dispute remains pending.
● December 2020—”Time frame: August 2019 to August 2020. Unsuitable investments, unauthorized trading, and churning.” Damages of $50,000 are requested. The customer dispute remains pending.
● March 2016—”TIME FRAME: MARCH 2010 – NOVEMBER 2015. CLAIMANT ALLEGES UNAUTHORIZED TRADING, OVER CONCENTRATION IN UNSUITABLE INVESTMENTS, UNSUITABLE USE OF MARGIN, AND BREACH OF FIDUCIARY DUTY.” The customer dispute was settled for $46,000.
● February 2009—”CUSTOMERS, THROUGH COUNSEL, ALLEGE THAT MR. HANANEL, FROM FEBRUARY 2007 THROUGH DECEMBER 2008, MADE VARIOUS MISREPRESENTATIONS TO CLAIMANTS, UPON WHICH THEY RELIED, RESULTING IN SIGNIFICANT DAMAGES.” The customer dispute was settled for $150,000.
● July 2002—”UNAUTHORIZED TRADING; SUITABILITY OF INVESTMENTS.” The customer dispute was settled for $52,000.
For a copy of Scott Hananel’s FINRA BrokerCheck, click here.
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.
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 agee, 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 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.