On April 10, 2018, FINRA announced it barred securities broker Scott Palmer from associating with firms registered with FINRA. FINRA (Financial Industry Regulatory Authority, Inc.) registers and regulates securities brokers and brokerage firms.
In a Letter of Acceptance, Waiver and Consent (AWC), FINRA stated it barred Scott Palmer for declining to provide sworn testimony in FINRA’s investigation of Palmer. The AWC stated FINRA was investigating Palmer for potentially recommending unsuitable investments to his customers.
According to FINRA records, twelve of Scott Palmer’s customers have filed claims against him, including ten alleging suitability violations. Six pending claims seek recoveries of more than $600,000 for losses that Palmer allegedly caused by making unsuitable investment recommendations in customers’ accounts.
Palmer and his employers settled four previous complaints against him that alleged suitability violations by making collective payments to the customers of $301,500. Several of the customer claimants alleged Palmer’s unsuitable recommendations involved portfolios overconcentrated in the energy sector.
Scott W. Palmer entered the securities industry in 1973. From March 2007 through June 2017, he was registered as a General Securities Representative with Janney Montgomery Scott LLC. He has not been registered with a securities firm since leaving Janney.
Recovery Options for Losses Due to Unsuitable Recommendations
Rules and regulations require brokers, like Scott Palmer, to 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.
Concentrating an investment portfolio in one market sector is usually irresponsible. This will subject a large portion of the portfolio to risks inherent in that sector. Energy sector investments (oil, gas, power, renewables) carry significant risk of large price fluctuations from unpredictable events like the weather and energy surpluses. It would be unsuitable for brokers to concentrate most investors in this sector.
Investors can recover losses caused by brokers’ unsuitable investment product and strategy recommendations through FINRA arbitration claims.
Moreover, brokerages, like Janney Montgomery Scott, have a duty to supervise their brokers to ensure they only recommend suitable investment products and strategies. Investors have the right to pursue FINRA arbitration claims for their losses caused by firms inadequately supervising their brokers. Arbitrators may hold firms responsible for their brokers’ misconduct.
If you suffered losses while investing with Scott Palmer, Marquardt Law Office LLC is interested in speaking with you. Contact the firm to speak with a securities attorney about your recovery options and receive a free case evaluation.
Marquardt Law Office LLC is a securities law firm that represents clients nationwide who have suffered losses due to misconduct such as fraud and negligence.