Los Gatos, CA Broker Discloses Two Pending Arbitrations Alleging $1.85 Million in Damages
According to publicly available information through the Financial Industry Regulatory Authority (FINRA), dually registered stockbroker and investment adviser, Richard Evan Baer (Baer, CRD# 848798), has been named or otherwise involved over the course of his career in a total of five customer disputes. Further, FINRA BrokerCheck indicates that two pending securities arbitration proceedings concerning Mr. Baer generally involve allegations of unsuitable recommendations, in addition to purported elder abuse.
Richard Baer has been affiliated with Los Gatos, California-headquartered Lion Street Financial, LLC since January 2015, through which affiliation he acts as a stockbroker. In addition, he is also an SEC-registered investment adviser, and as such, is affiliated with both React Investment Solutions, LLC (since June 2015) and Legacy Capital Group California, Inc. (since July 1997), also of Los Gatos, CA. Of the two pending securities arbitration proceedings naming or otherwise involving Mr. Baer, these disputes involve allegations of unsuitability, misrepresentations, as well as purported elder abuse in violation of California Welfare and Institutions Code (namely, institutions cod ss15600). In aggregate, these pending FINRA claims seek damages of $1,850,000.
Financial advisors like Mr. Baer have a legal duty and regulatory obligation to only recommend suitable investments to their customers that are appropriate for their clients’ needs and in accordance with their stated investment objectives and risk tolerance. If this duty is breached, then investors who have suffered losses may be entitled to recover these losses. Reasonable basis suitability, as set forth under FINRA Rule 2111, requires that a recommended investment (or investment strategy) be suitable or appropriate for at least some investors. Further, in order to adhere to the reasonable basis standard, a broker-dealer—and by extension the financial advisor—must conduct adequate due diligence on an investment so that the broker may properly evaluate the risks and rewards of the investment.
Furthermore, financial advisors must also ensure that they adhere to their customer-specific suitability obligations, which requires the financial advisor to have a reasonable basis to believe that a specific investment recommendation (including an investment strategy) is suitable for a particular customer based upon his or her profile. Pursuant to FINRA Rule 2111 certain criteria must be evaluated to conduct a comprehensive suitability analysis, including the investor’s age, financial situation and needs, tax status, investment objectives and risk tolerance, as well as time horizon and liquidity needs. In instances where a broker makes an unsuitable recommendation, then the customer may bring a claim against the broker, as well as the broker-dealer for its failure to supervise any negligence or other misconduct.
If you have invested with Mr. Baer, or another financial advisor, and believe that you have suffered losses due to unsuitable investment recommendations, you may be able to recover your losses in securities arbitration before FINRA. The attorneys at Giarrusso Law Group LLC have considerable experience working with investors on claims related to unsuitable investments and investment programs. Investors who wish to discuss a possible claim may contact us by telephone at (201) 771-1115 or by email at info@gialawgroup.com for a no-cost and no-obligation consultation.