Have you invested any of your hard-earned capital with Presidential Brokerage (CRD#: 28784)? If so, you need to be aware of the recent history of investor complaints and regulatory sanctions that have been issued against this firm. Based in Central Colorado, Presidential Brokerage is currently doing business in 50 U.S. states and American territories.
At Sonn Law Group, our experienced securities fraud attorneys are currently investigating investor claims against Presidential Brokerage. If you lost money investing with this brokerage firm or with any of the company’s financial advisors, please contact our legal team to set up an immediate review of your case.
Investor Complaints Against Presidential Brokerage
Presidential Brokerage Was Named in the Bad Broker Study
In June of 2017, a team of researchers from Columbia Law School teamed up in a partnership with Reuters to put together a list of ‘bad brokerage firms. The full report on ‘bad brokerage firms’ was then released to the public.
In total, 50 different brokerage firms were named in the report. These brokerage firms all employed an abnormally high number of financial advisors who had ‘red flags’ on their securities industry record. The report defined a ‘red flag’ as being any type of material adverse information that might give an ordinary investor pause. These types of ‘red flags’ come in a variety of different forms. Some of the most common reasons why an individual financial advisor could have a ‘red flag’ on their record are as follows:
- Customer disputes;
- FINRA arbitration claims;
- Regulatory sanctions;
- Personal bankruptcy; and
- Termination from employment following allegations of misconduct.
Presidential Brokerage was one of the 50 brokerage firms highlighted in the study. According to the researchers, more than one third of the financial advisors who are employed at Presidential Brokerage have negative marks on their record. Clearly, this is a figure that is far higher than the industry average.
Breach of Fiduciary Duty: Negligent Real Estate Investment Recommendations
In September of 2015, one of Presidential Brokerage’s former clients brought a complaint against the firm. Eventually, this complaint went before a Denver, Colorado-based FINRA arbitration panel.
The complaint followed a failed investment that the client had made after listening to advice offered by a representative of Presidential Brokerage. More specifically, the investment was related to a complex and risky real estate investment property. At the FINRA arbitration hearing, the investor raised several different causes of action, including:
- Violation of federal securities laws;
- Violation of the Colorado Securities Act;
- Violation of the Colorado Consumer Protection Act;
- Breach of fiduciary duty; and
- Brokerage negligence.
After hearing all of the facts in the case, the FINRA arbitration panel agreed with the client, finding that Presidential Brokerage did indeed violate its duties under the law. As a result of the panel’s findings, a total of $654,095.80 in financial compensation was awarded to the wronged investor.
Unsuitable Mutual Fund Recommendations
Registered brokerage firms and their financial advisors have a professional obligation to make sure that they are only recommending suitable investments to their customers. An unsuitable investment is one that does not make sense for an investor, given their unique investment profile, current holdings, future objectives, and level of risk tolerance.
Unfortunately, Presidential Brokerage firm and its investment representatives have not always followed through with their basic obligations. There are several cases in which individual brokers have been determined to have made unsuitable investment recommendations.
In September of 2005, regulatory officials discovered that the firm itself had an insufficient supervisory system in place to ensure that all financial advisors were complying with industry rules and regulations. Specifically, regulators found that Presidential Brokerage had systematically made unsuitable investment recommendations to several different customers.
According to FINRA’s records, the brokerage firm was recommending ‘Class B’ mutual fund shares to certain customers, when ‘Class A’ shares would have unquestionably made more sense given the circumstances. By doing this, the Presidential Brokerage customers were paying more in fees than was necessary, while the firm was raking in an ill-gotten benefit. As a result of the misconduct, Presidential Brokerage was fined $70,000 and ordered to pay $65,083 in financial restitution.
Contact Our FINRA Arbitration Attorneys Today
At Sonn Law Group, our top-rated securities fraud lawyers are proud to fight for the rights and interests of investors nationwide. If you have lost money investing with Presidential Brokerage and you believe that you were a victim of broker negligence, we can help. Please contact our legal team today to request a free, fully confidential claim review.