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Suitability Supervision

The Financial Industry Regulatory Authority (FINRA) judges all sales recommendations based upon whether the sale meets the ethical standards of the industry. Brokerage firms are required to supervise the suitability of their broker’s investment recommendations.

FINRA’s suitability rule requires that all brokers must have a reasonable basis to believe that the recommendation is suitable for at least some investors. Regardless of the specific product or investment strategy being recommended, brokers must convey the risks and rewards associated with the recommended security or strategy before bringing it to an investor’s attention. In addition, all brokers must have a reasonable basis to believe that the recommended investment strategy is suitable for the particular customer. The broker must take into account the investor’s risk tolerance, investment objectives, age, financial circumstances, other investment holdings, and experience in making the investment recommendation.

In exercising a brokerage firm’s supervision duties the firm must put in place and implement a supervisory procedure designed to reasonably ensure compliance with the suitability rule. Such a system often includes periodic reviews of a broker’s investment recommendations for potential red flags indicating potential misconduct. Brokerage firms should also ensure that an investor’s concentration in a particular security or type of security is reasonable in light of the investor investment objectives and risk tolerance.

Evidence that all or many of the broker’s clients are invested in the same products or concentrated in particular securities may reveal that the broker has failed to tailor their investment recommendations to each individual client’s needs. Often times a broker that recommends the same investment in nearly all client accounts is not taking into account each client’s financial objectives and would be considered a “red flag.” Finally, it is prudent for a brokerage firm that employs a broker with a history of suitability complaints to be placed under heightened supervision to ensure the broker’s compliance with the securities laws.

Client Reviews
Thank you Adam and all your colleagues for the professionalism and diligence in the final settlement of our securities fraud case. When a past law firm group turned our case down, you and your firm took on the case and we thank you for the great outcome. We would highly recommend your firm. Gloria K.
I will never forget how much you helped me by winning my case! I never thought I would see any money from my investment. I admire the way you fight for everyday people against big companies. Thank you so much! Myra W.
Adam is an outstanding lawyer. I have worked on several cases with Adam and look forward to working with him again in the future. Rob D. - Co-Counsel.
If you want an attorney that is easy to talk to and genuinely cares about your legal situation, contact Adam Gana. He helped me settle a difficult contract dispute. When you work with Adam, he makes you feel as if you are his top priority. He will call you regularly to stay on top of the situation and submits all necessary legal documentation in a timely manner. His writing is excellent, his demeanor professional, and his work exceptional. Nancy N.
Adam helped me recover money from my broker when I thought all was lost. My house was about to be foreclosed, and I lost everything. Adam came in and saved my life. Jean C.