As a former financial advisor and legal expert with over a decade of experience, I’ve seen my fair share of cases involving allegations of misconduct by financial professionals. The recent complaint against Brooklyn-based financial advisor Andy Huang is a serious one, alleging conversion of funds, breach of fiduciary duty, fraud, misrepresentation, negligence, and unjust enrichment while he was a representative of Glendale Securities. The pending complaint seeks damages of a staggering $580,000.
Allegations of this nature can have significant consequences for investors who may have entrusted their hard-earned money to an advisor they believed they could trust. It’s crucial for investors to remain vigilant and thoroughly vet any financial professional they are considering working with. As the saying goes, “Trust, but verify.”
So, who is Andy Huang? According to his FINRA BrokerCheck report, he has 24 years of experience in the securities industry and has been registered with Glendale Securities in Brooklyn, New York since 2005. Prior to that, he was registered with several other firms, including Great Eastern Securities, Global Access Financial Services, and White Pacific Securities.
However, this is not the first time Huang has faced disciplinary action. In 2017, FINRA sanctioned him for failing to detect and report suspicious activity, including anti-money laundering (AML) red flags, in connection with his firm’s penny stock business. As a result, he was:
- Suspended for 10 business days
- Ordered to pay a fine of $5,000
- Required to pay a monetary penalty of $2,000
Additionally, in 2021, securities regulators in Massachusetts placed Huang on heightened supervision in connection with the 2017 FINRA findings.
Understanding FINRA Rules and Consequences
FINRA Rule 3110 requires member firms to establish and maintain a system to supervise the activities of their associated persons to ensure compliance with applicable securities laws and regulations. When a financial advisor fails to uphold these standards, as alleged in the complaint against Huang, the consequences can be severe.
Potential consequences for financial advisors found to have engaged in misconduct may include:
- Fines
- Suspensions
- Permanent barring from the securities industry
- Criminal charges, in some cases
For investors who have suffered losses due to the misconduct of a financial advisor, pursuing a claim through FINRA arbitration or civil litigation may be an option to seek recovery of damages.
Lessons Learned and Protecting Yourself
Cases like this serve as a stark reminder of the importance of thoroughly researching any financial professional before investing. Some key steps investors can take to protect themselves include:
- Checking an advisor’s background and disciplinary history through FINRA‘s BrokerCheck
- Asking questions and ensuring you fully understand any investment recommendations
- Diversifying your portfolio to manage risk
- Regularly reviewing your account statements for any suspicious activity
Remember, even a single complaint or disciplinary action can be a red flag. In fact, according to a 2019 study by the Stanford Law School, nearly one in twelve financial advisors have a history of misconduct.
As an investor, you have the right to work with a financial professional who will act in your best interests and uphold the highest ethical standards. If you believe you have been the victim of misconduct, don’t hesitate to seek help from a qualified attorney who specializes in securities law.
