SagePoint Financial Advisor Grant Birkley Barred by FINRA After Refusing to Aid Investigation into Allegedly Referring Customers To Outside Asset Manager
Grant Birkley (CRD#: 2933533) is a previously registered Broker and Investment Advisor at SagePoint Financial, Inc. in Barrington, IL. He entered the securities industry in 1998 and previously worked for Wells Fargo Clearing Services, LLC; Merrill Lynch, Pierce, Fenner & Smith, Incorporated; and Shepherd Financial Group, LLC.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in June 2021, FINRA sanctioned Grant Birkley, barring him indefinitely from all capacities, beginning June 4, 2021. The FINRA sanction states, “Without admitting or denying the findings, Birkley consented to the sanction and to the entry of findings that he refused to produce information and documents requested by FINRA during the course of its investigation of a Form U5 filed by his member firm. The findings stated that the firm filed the Form U5 stating that it discharged Birkley after he admitted making referrals to an outside asset manager without the firm’s approval.”
For a copy of the FINRA sanction, click here.
In addition, Grant Birkley has been the subject of three customer complaints, including two that remain pending, including the following:
● August 2020–”Inappropriate involvement in sale of unapproved product is alleged.” The customer complaint is pending. Damages of $1.4 million are sought.
● August 2020–”Registrant admitted to making referrals to an outside asset manager without approval of the bd.” Grant Birkley was discharged from SagePoint after allegations made.
● August 2020–”Recommendation of inappropriate fund (not bd approved).” This customer dispute is pending; damages of $900,000 are requested.
For a copy of Grant Birkley’s FINRA BrokerCheck, click here.
The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
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 firstname.lastname@example.org.