On March 16, 2018, FINRA fined Martin Earl Brooks $5,000 and suspended him from associating with firms registered with FINRA for fifteen days. FINRA (Financial Industry Regulatory Authority, Inc.) registers and regulates stock brokers and brokerage firms.
FINRA announced the sanctions in its Letter of Acceptance, Waiver and Consent (AWC). The AWC states Brooks allegedly exercised discretion on behalf of five of his customer to purchase real estate funds without receiving written authority from the customers to make the purchases.
According to the AWC, Brooks also allegedly caused order tickets to erroneously reflect the customers placed orders for those purchases. The purchases occurred on April 5, 2016. Brooks consented to the sanctions by signing the AWC, which also states he did not admit or deny any of FINRA’s allegations.
FINRA records state a customer filed a complaint against Brooks in April 2016 alleging they experienced $750,000 in losses due to Brooks recommending an investment in a direct participation program/limited partnership that the customer claimed was unsuitable. The claim settled in July 2017 for $490,000.
Martin Earl Brooks entered the securities industry in 2002. He was registered as a General Securities Representative and Investment Adviser Representative with Cetera Advisors LLC (formerly known as Multi-Financial Securities Corporation) from October 2006 through April 2016. At Cetera, he worked out of an office in Belton, Missouri. Cetera reported it dismissed Brooks in April 2016 due to allegations he recommended unsuitable investments to a client.
Since April 2016, Brooks has been a Registered Securities Representative and Investment Adviser Representative with United Planners’ Financial Services of America a Limited Partner. He currently works out of a Scottsdale, Arizona branch office.
Unsuitable Investments and Unauthorized Trades
Rules and regulations require brokers and advisors, like Martin Earl Brooks, recommend only suitable investment products and strategies to their customers. Suitability is based on factors such as a customer’s age, investment objective, risk tolerance, investment experience, and financial status and needs. Real estate investment, including REITS, can be unsuitable to many investors due to their potential costs and risks.
Additionally, brokers are required to obtain express written authority from customers before making decisions on behalf of the customers to place trades. However, when brokers make decisions on behalf of their customers, they owe their customers a greater duty of care, even if the brokers did not properly obtain authority to make those decisions.
Moreover, brokerage firms have a duty to closely monitor and supervise their brokers to ensure they follow securities rules and regulations. This includes supervising brokers to ensure they only recommend suitable investment products and strategies. A firm’s duty to supervise a broker is heightened when the broker makes decisions on behalf of a customer. This is true even if the broker did not obtain such authority from the customer.
Recovery Options for Unsuitable Investments and Unauthorized Trades
If you believe you may have suffered investment losses from unsuitable investments or unauthorized trades, contact Marquardt Law Office LLC to speak with a securities attorney and receive a free case evaluation.
Marquardt Law Office LLC is a securities law firm located in Chicago, IL that represents clients nationwide who have suffered losses due to misconduct such as fraud and negligence.