In a Financial Industry Regulatory Authority arbitration case, Raymond James Financial Services Inc. (RJF) has been ordered to pay David B. Silipigno $593,540 plus 3 years and 9 months of interest. That’s an award of about $795,000. According to Silipigno’s attorney, the securities arbitration case involved an RIA who may not have not licensed with FINRA but worked out of the Raymond James independent contractor branch office.
The attorney said that such a work configuration may cause problems in that a non-registered adviser could effectively become a defacto employee of a brokerage firm. OnWallStreet.com names the broker involved as Karen Powell, who has been affiliated with Raymond James since 1999.
Silipingo, in his claim, asserted a number of causes of action, including common law fraud, breach of fiduciary duty, beach of contract, suitability, churning, failure to supervise, and violations of Rule 10b-5 of the Securities Exchange Act violation and The Florida Securities Investor Protection Act. Raymond James continues to deny the allegations. The arbitration panel denied the firm’s request to have Powell’s CRD expunged in this matter.
As noted by Silipingo’s attorney in an email, sometimes there is the danger of weak supervision at investment advisor firms, especially at independent contractor branch offices. Lack of internal controls and lax supervision may make it easier for fraud and negligence to occur. Unsuitable sales, churning, misrepresentations, omissions, churning, breach of fiduciary duty, and breach of contract are some examples of what can happen when a strong enough supervisory system, policies, and procedures, are not put in place.
It is important that you work with an investment adviser who is registered with the Securities and Exchange Commission or a state’s securities agency. Typically, only bigger advisers with at least $110 million of assets under management or firms that advise investment company clients are allowed to registered with the SEC. Smaller advisers must registered with the states where they intend to conduct business unless they meet any exemptions under state laws. You can contact the SEC or the state to find out if the firm or adviser you are working with is registered.
At Shepherd Smith Edwards and Kantas, LTD LLP, our securities law firm represents victims of investment adviser fraud who have sustained substantial losses because the firm or an adviser acted negligently or carelessly. Over the years, we have helped thousands of investors recoup their losses.
David Silipigno wins $600,000 in case against Raymond James, Times Union, February 24, 2016