As a financial analyst and legal expert with over a decade of experience, I’ve seen my fair share of investment fraud cases. The recent allegations against former Kestra Investment Services broker, Thomas Lundgaard, are serious and warrant attention from investors.
According to the information available, Mr. Lundgaard is facing customer disputes alleging unsuitable investment recommendations, misrepresentation, and excessive trading. These types of claims can have significant consequences for investors, potentially leading to substantial financial losses.
The Seriousness of the Allegations
Unsuitable investment recommendations occur when a financial advisor recommends investments that do not align with an investor’s risk tolerance, financial goals, or overall investment profile. Misrepresentation involves providing false or misleading information about an investment, while excessive trading, also known as churning, generates commissions for the broker at the expense of the investor’s interests.
These allegations, if proven true, constitute a clear breach of trust between the financial advisor and their clients. As an investor, it’s crucial to work with a financial professional who prioritizes your best interests and provides transparent, accurate information about potential investments. Unfortunately, investment fraud and bad advice from financial advisors are more common than many people realize. In fact, a study by Forbes found that investment fraud costs Americans billions of dollars each year.
Thomas Lundgaard’s Background
Mr. Lundgaard’s employment history includes stints at several well-known broker-dealers:
- Kestra Investment Services, LLC (2016 – 2023)
- SII Investments, Inc. (2009 – 2016)
- SagePoint Financial, Inc. (2005 – 2009)
- SunAmerica Securities, Inc. (1996 – 2004)
It’s important to note that Mr. Lundgaard has a history of customer disputes, with at least one prior complaint alleging unsuitable investments dating back to 2002, according to his FINRA BrokerCheck report.
Understanding FINRA Rules
The Financial Industry Regulatory Authority (FINRA) is a self-regulatory organization that oversees the conduct of financial advisors and broker-dealers. FINRA Rule 2111 requires that financial advisors have a reasonable basis to believe that an investment recommendation is suitable for a particular customer based on their investment profile.
Additionally, FINRA Rule 2020 prohibits financial advisors from making untrue statements or omitting material facts in connection with the purchase or sale of securities. Excessive trading violates FINRA Rule 2111 and may also violate other securities laws.
Consequences and Lessons Learned
For investors who have suffered losses due to unsuitable investments, misrepresentation, or excessive trading, it’s essential to understand your legal rights and options. Consulting with an experienced securities attorney can help you navigate the complex legal process and potentially recover your losses. If you believe you have been a victim of investment fraud or misconduct, consider reporting your experience to regulators and sharing your story on platforms like Financial Advisor Complaints to help others avoid similar situations.
As the famous quote goes, “Trust, but verify.” This adage holds especially true when it comes to investing. While it’s important to establish a trusting relationship with your financial advisor, it’s equally crucial to stay informed, ask questions, and monitor your investments closely.
Did you know that according to a 2020 FINRA study, approximately 60% of investors who experienced fraud did not report it? This underscores the importance of speaking up if you suspect misconduct or have concerns about your investments.
The allegations against Thomas Lundgaard serve as a reminder of the importance of due diligence when selecting a financial advisor. By staying vigilant and informed, investors can better protect themselves against potential fraud and misconduct in the financial industry.
