Analyzing FINRA Regulatory History of Joseph Gunnar & Company

Analyzing FINRA Regulatory History of Joseph Gunnar & Company

::

Let’s start with the quote, “The art is not in making money, but in keeping it,” often attributed to Proverbs. This wisdom underscores the importance of financial management, and more importantly, trusting your finances to the right professionals.

1. Allegation’s Seriousness, Case Information, and How it Affects Investors

Joseph Gunnar & Company LLC, a national financial advisory firm, is facing FINRA’s regulatory action with over 16 disclosure events including 4 regulatory events, and 12 arbitrations. With $28.7 million under management, the implications of these allegations can have a substantial impact on the investors involved.

  • Unfair Charges: The firm leveled minimum commissions of $100 on specific equity transactions, resulting in unfair charges on 1,683 transactions.
  • Non-compliance: The firm did not strictly adhere to FINRA’s rules, primarily the failure to file offering documents for 14 private placements.
  • Broker Misconduct: Certain brokers under the firm failed to execute mandates professionally, involving unauthorized trades and failure to exercise written discretion.

The potential financial harm from such conduct can grievously affect investor’s portfolios – a stark contrast to the fundamental objective of wealth preservation and growth.

2. The Financial Advisor’s Background, Broker Dealer and any Past Complaints

No singular event occurs in isolation. Joseph Gunnar & Company have had their run-ins with regulatory bodies in the past. The details manager’s track records, as per FINRA BrokerCheck (CRD# 24795), paint a worrisome picture.

  • In 2020, the firm found itself censured and fined for failure to identify and report suspicious transactions involving low-priced securities and foreign financial institutions.
  • In 2017, the firm failed to properly oversee customer accounts resulting in unsuitable high-risk investments, levying a $60,000 fine.

Transgressions like these undermine investor trust and highlight the importance of thorough due diligence when choosing financial advisors.

3. Explanation in Simple Terms and the FINRA Rule

Beneath the jargon-heavy glamour, the financial industry is grounded in rules – guidelines that moderate the actions of organizations and individuals. One such is the FINRA Rule 3110, known as the Supervision Rule. This rule mandates firms to supervise their representatives to prevent contraventions, safeguarding investors. In simple terms, it’s the firm’s responsibility to prevent their representatives from stepping out of line.

4. Consequences and Lessons Learned:

Joseph Gunnar & Company faced several censures, fines for their non-compliance and corrosive behavior. But more importantly, it damaged the financial wellbeing of its clients and the firm’s reputation.

Every investor, novice or seasoned, should glean two lessons:

  • Conduct due diligence before choosing your financial advisor and
  • Regularly monitor your investments, not completely depending on your advisor to make or break your wealth growth.

As alarming as bad financial advice might sound, per a 2018 study by the Securities Litigation and Consulting Group, it estimated that 7.3% of financial advisors have misconduct records. The integrity of your advisor matters – because at the end of the day, it’s your wealth at stake.

Scroll to Top