The securities fraud lawyers at Sonn Law Group are currently investigating investor complaints against Park Avenue Securities. This brokerage firm is based in New York City and is licensed to operate throughout the country.
Below we’ve detailed several notable regulatory sanctions and customers disputes involving Park Avenue Securities (CRD#: 46173).
Investor Complaints Against Park Avenue Securities
Misappropriation of Client Funds
In November of 2016, FINRA’s Department of Enforcement fined Park Avenue Securities $195,000, after a non-registered company employee stole money from the firm’s clients. One administrative assistant employed by the firm was able to make 63 unauthorized transactions from two different Park Avenue Securities clients, transferring money out of their trading accounts and into a bank account that she owned. In all, more than $250,000 was stolen from these clients.
Park Avenue Securities has refunded that money. Though, according to the investigation conducted by FINRA officials, Park Avenue’s inadequate security made client funds vulnerable. As such, a significant additional fine against the broker-dealer was deemed necessary. Protecting client money from outright theft is one of the most basic professional duties of registered brokerage firms.
Registered brokerage firms owe their customers fiduciary obligations. One of these obligations is to ensure that customers always get the best available price. However, in October of 2015, FINRA determined that Park Avenue Securities fell well short of this professional duty. According to FINRA officials, Park Avenue failed to apply the appropriate sales discounts on certain Unit Investment Trust (UIT) products.
As a result of the broker negligence, investors were charged excessive fees. Upon reviewing the case, FINRA issued a $300,000 fine against the firm and ordered it to pay more than $440,000 in financial restitution to affected investors.
Unsuitable Investment Recommendations: Variable Annuities
In December of 2010, a FINRA arbitration panel based in Boca Raton, Florida awarded $300,000 in financial compensation to a former client of Park Avenue Securities. This client accused the firm of:
- Breach of fiduciary duty;
- Negligence; and
- The failure to properly supervise representatives.
The dispute in this case arose after the investor sustained major losses after following the recommendations made by a Park Avenue Securities broker. Specifically, this broker was instructing the client to purchase large quantities of certain complex variable annuities.
The FINRA arbitration panel agreed with the investor that the risks associated with this investment were not properly explained and that the investment was unsuitable for his individual needs. As such, he was entitled to compensation for his losses.
The experienced securities fraud lawyers at the Sonn Law Group can help investors recover the full and fair compensation in cases of broker negligence or fraud. Please call us today at 844-689-5754 to set up a free, no obligation case evaluation. From our primary office in South Florida, we represent wronged investors throughout the United States and Puerto Rico.