As someone who has witnessed the intersecting worlds of finance and law for over a decade, I can confidently say that trust is a fundamental, non-negotiable element of these sectors. So, imagine encountering a situation where this bedrock is crumbled, and you’re left grappling with the consequences. This is sadly the predicament faced by some investors when trust is betrayed by people like Mark Alan Cline, former representative for B. Riley Wealth Management.
Allegation’s Seriousness, Case Information, and How it Affects Investors
It is profoundly disturbing to note that ex-B. Riley Wealth broker Mark Alan Cline, is reported to have accumulated 20 customer complaints on his broker record, all detailed on the Financial Industry Regulatory Authority’s website. Cline’s alleged unsuitable recommendations connected to the high-risk and illiquid GWG L Bonds investment sponsored by GWG Holdings lead to three of these complaints. The investment sponsor, Dallas-based GWG Holdings, defaulted on $13.6 million in interest payments to its bondholders and consequently filed for Chapter 11 bankruptcy protection on April 20, 2022.
The seriousness of these allegations against Cline and B. Riley Wealth Management is not to be downplayed. Each piece of this case paints a clear picture – investors’ trust was betrayed repeatedly, and they were left to bear the brunt of substantial financial losses. Of course, this financial blow wasn’t limited to just their wallets but extended to their psychological and emotional well-being.
Warren Buffett famously quoted, “It takes 20 years to construct a reputation and five minutes to ruin it.” By the look of things, B. Riley Wealth Management and associated individuals like Mark Alan Cline seem to have been remarkably effective at decimating not just their reputations but also investor’s hard-earned wealth and faith.
The Financial Advisors’ Background, Broker Dealer, and Past Complaints
Interestingly, B. Riley Wealth Management and its affiliate B. Riley Wealth Advisors have a substantial presence in the industry. Registered in 2005, B. Riley Wealth Advisors has over 415 advisors and manages a mighty $6.9 billion in assets. Its sister concern B. Riley Wealth Management, registered since 1984, carries a burdensome 23 disclosures on its record, spanning 18 regulatory filings and 4 arbitrations, among others.
Focusing on Mark Alan Cline, his record seems overrun with customer complaints. The gravity of these complaints affects not only Cline’s professional reputation but also taints B. Riley Wealth Management’s overall credibility. The alleged unsuitable investment advisories and associated misconduct have led multiple customers to bear substantial losses, instigating customer complaints and legal proceedings.
Such instances highlight the fact that according to PIABA, nearly 75% of brokers who were fired by their firms for misconduct found employment in the industry within a year. This underscores how crucial it is for investors to routinely check their financial advisors’ background and complaint history.
Explanation in Simple Terms and the FINRA Rule
These cases underline a crucial fact: understanding the implications of your investments and knowing who you’re entrusting your savings with is cardinal. Also, it’s essential to grasp the importance of the Financial Industry Regulatory Authority’s (FINRA) rules regarding broker-dealer supervision. Lack of oversight by firms can be damaging to investors, just as it was in B. Riley Wealth Management’s case.
- FINRA Rule 3110: The rule asserts that a brokerage firm must establish and maintain a system to supervise the activities of its associated individuals to ensure compliance with securities laws and regulations. This is crucial for investor protection.
- FINRA Rule 3290: This rule prohibits individuals from participating in any private securities transactions without giving prior written notice to their member firm. This is to discourage unauthorized trading.
Consequences and Lessons Learned
Several regulatory actions involving B. Riley Wealth Management have emerged over the years. B. Riley has been accused of supervisory failures related to 529 Plan recommendations, as well as their representatives getting ensnared in broker misconduct and allegedly fraudulent activities. This neglect has led to enormous setbacks for the firm – from financial penalties to severe damages to their reputation.
However, the silver lining for aggrieved investors is that brokerage firms can be held accountable for faulty investment recommendations and consequently be liable for investment losses during FINRA Arbitration.
One lesson rings clear – trusting your investment advisor and financial institutions is essential, but critically examining their background, understanding your investments, and staying informed about evolving financial trends is paramount.
If you’ve suffered losses investing with B. Riley Wealth Management and need to speak with a securities legal expert, feel free to reach out at 888-637-5510.
