- The Seriousness of the Allegations and Impact on Investors
Tory Duggins, a financial advisor with a career in the securities industry, has recently been called into question. According to the Financial Industry Regulatory Authority (FINRA), Duggins has been suspended for 18 months for willfully violating the Best Interest Obligation under Rule 15l-1 of the Exchange Act (Regulation BI).
As per FINRA’s allegations, Duggins reportedly recommended a series of excessive trades to his clients, some of whom were elderly. His trading actions have been marked as unsuitable and not in the best interest of the customers in view of their investment profiles.
- The total trading charges reportedly accumulated to a whopping $444,176, including $343,416 in commissions alone.
- The trades led to a total loss of $235,494 for the investors.
The scale of the losses highlights the possible deluge of distress that can befall investors when faced with irregular, excessive trading. “Every dime is a soldier. We never let our money march without related orders” – Bill Gross. It’s a crucial reminder to entrust our capital to those who adhere strictly to ethical practices.
A financial fact to consider here: 65% of malpractice claims against financial advisors are related to negligence and inappropriate advice (DeVoe, 2020). Tory Duggins’ alleged actions serve as an alarm bell, indicating the kind of colossal damage inappropriate investment advice can inflict on an individual’s financial health.
2. Background of the Financial Advisor and Any Past Complaints:
Tory Duggins (CRD#: 4556340) has a track record that has been subject to scrutiny before. Duggins has been registered with the following brokerage firms among others:
- SPARTAN CAPITAL SECURITIES, LLC (CRD#:146251), NEW YORK, NY
- AVENIR FINANCIAL GROUP (CRD#:148490), FINRA expelled the firm on 09/19/2016, NEW YORK, NY
- NATIONAL SECURITIES CORPORATION (CRD#:7569), NEW YORK, NY
He has a history of four customer complaints lodged against him for allegations of unauthorized trades, excessive trading, and excessive commissions. One customer reportedly filed a complaint seeking $17,500 in compensatory damages, claiming that his account was excessively traded.
3. FINRA Rule 15l-1 Simplified:
FINRA Rule 15l-1, better known as Regulation Best Interest (Reg BI), is designed to ensure that brokers act responsibly and in the best interests of their clients. It stipulates that brokers must avoid prioritizing their interests over those of their clients, particularly in regards to excessive trading and generating unnecessary commissions.
4. Consequences and Lessons Learned:
For now, Tory Duggins has been suspended for 18 months by FINRA. Given the severity of the allegations, this is a case that raises serious concerns about the ethical behavior of financial professionals. It serves as a crucial reminder to investors to remain vigilant about who they entrust with their finances.
FINRA’s BrokerCheck tool is the best starting point for any investor to research and verify the credentials of their broker or potential broker. This case underscores that investors need to fully understand their broker’s trading strategy, and to be alert to any irregular or excessive trading patterns, which might just be red flags for action prioritizing broker’s benefits over theirs.
