Former broker, Eric Olin Shanks, was recently named in a lawsuit against Cuso Financial Services. The suit alleges the former broker sold fraudulent investment products. Shanks was with Cuso from 2004-2014.
The suit accuses the broker of directing investors toward outside investments, a practice known as “selling away.” Brokers who sell unapproved securities are usually chasing profits offered by riskier investments.
Under FINRA rules, brokers must gain approval from their member firm for any outside activities. This due diligence reduces the risk for investors.
Shanks allegedly solicited clients to invest in an outside product called “Aurora.” The investment involved a second broker, Conrad Bautista who FIRNA had barred in 2013. Cuso fired Shanks in April 2014 following allegations he did not disclose the sale of a fixed annuity to instead buy a variable annuity.
Shanks’ record shows at least 4 customer complaints since 2014. One customer complains that Shanks and Bautista sold them the unapproved investments between 2012 and 2014. This complaint settled for over $67,000.
The activity of both former brokers has led to the current suit against Cuso. The suit charges the firm with negligence, breach of fiduciary duty, and failure to properly supervise its brokers. The claimants are seeking more than $500,000 in damages.
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At Sonn Law Group, our team of lawyers has extensive experience representing clients who have experienced losses related to broker misconduct and investment fraud. Contact us for a free case review. We will determine if you have a reasonable claim and help you decide how to proceed.
Source: Financial Advisor
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