Sagepoint Financial Advisor Cynthia Komarek Barred by FINRA After Refusing Request for Information During Investigation For Making Referrals To Outside Manager
Cynthia Komarek (CRD#: 1188714), also known as Cynthia Brown, Cynthia Brown Komarek, and Cynthia Brown Pearson) was a previously registered Broker and Investment Advisor at Sagepoint Financial, Inc., in Barrington, IL. She entered the securities industry in 1983 and previously worked for Wells Fargo Clearing Services, LLC; Merrill Lynch, Pierce, Fenner & Smith, Inc.; Lehman Brothers, Inc.; E.F. Hutton & Co., LLC; and Oberweis Securities, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in June 2021, FINRA sanctioned Cynthia Komarek, barring her from associating with any member firm in any capacity indefinitely, beginning on June 4, 2021. The FINRA sanction states, “Without admitting or denying the findings, Komarek consented to the sanction and to the entry of findings that she refused to provide documents and information requested by FINRA during the course of its investigation of a Form U5 filed by her member firm. The findings stated that the firm filed the Form U5 stating that it discharged Komarek after she admitted making referrals to an outside asset manager without its approval.”
For a copy of the FINRA sanction, click here.
In addition, Cynthia Komarek has been the subject of three customer complaints, including two that remain pending, including the following:
● August 2020–”inappropriate involvement in sale of unapproved investment product is alleged.” Damages of $1.4M are requested. The customer dispute is pending.
● August 2020–”Registrant admitted to making referrals to an outside asset manager without approval of the bd.” Cynthia Komarek was discharged from Sagepoint Financial, Inc.
● August 2020–”recommendation of inappropriate fund (not bd approved).” Damages of $900,000 are sought. The customer dispute is pending.
● February 1999–”CUSTOMER ALLEGES THAT MATERIAL INFORMATION WAS NOT DISCLOSED TO HIM REGARDING HIS VARIABLE ANNUITY. THE CUSTOMER REQUESTED SURRENDER OF THE VARIABLE ANNUITY WITHOUT APPLICATION OF CONTINGENT DEFERRED SALES CHARGES.” Damages of $140,000 were sought; the customer dispute was denied.
For a copy of Cynthia Komarek’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.
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.
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