Berthel Fisher & Co. Censured & Fined for Failure to Supervise Unsuitable Options Trading
According to a document posted this week by the Financial Industry Regulatory Authority (FINRA), the regulator has censured and fined Berthel Fisher & Co. Financial Services Inc. (CRD No. 13609) $100,000.
According to FINRA, in August 2015, when reviewing a customer’s request for approval to trade options in his brokerage account, Berthel Fisher allegedly failed to exercise due diligence to ascertain the customer’s investment experience and knowledge.
Between August 2015 and February 2018, one of the firm’s brokers purportedly recommended options transactions to the same customer without having reasonable grounds for believing that the transactions were suitable for that customer. At the same time, Berthel Fisher reportedly failed to establish and maintain a supervisory system, including written procedures, reasonably designed to achieve compliance with FINRA’s rules pertaining to the suitability of options trading in customer accounts. The firm also allegedly failed to enforce multiple provisions of its written supervisory procedures pertaining to options trading.
In addition to the fine and censure, the firm agreed to adopt and implement policies, procedures, and systems to address the violations.
To learn more about the firm’s investigation of Berthel Fisher & Co., please see:
Options Trading is Risky and not Suitable for all Investors
Options are a type of derivative security. Options, which are essentially a contract, allow you to trade on the future value of an underlying market. Options trading is complex and risky and certainly not suitable for many investors.
To learn more, see:
Broker dealers are required to perform adequate due diligence on all investment recommendations they make. They must ensure that each investment is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
If your brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment, they may be liable for investment losses through FINRA arbitration.
Free Consultation with a Securities Attorney
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The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information, please visit our website, www.whitesecuritieslaw.com.