Over the course of my 38-year career as a financial advisor, I, Angelo Piccone, have faced several client disputes that have left a stain on my professional reputation. Between 2017 and 2023, three parties of investors filed complaints against me through FINRA, alleging serious misconduct such as unsuitable investment recommendations, breach of contract, negligence, misrepresentation, and supervisory failures during my time as a broker with IBN Financial Services.
The investments at the center of these disputes were high-risk, illiquid products, including oil and gas partnerships and non-traded REITs like United Development Funding III and Behringer Harvard REIT I. My former firm settled these claims for a total of $103,000, which serves as an acknowledgment of the validity of the allegations against me.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffett
The impact of unsuitable investment recommendations
Non-traded REITs and oil and gas partnerships are highly speculative investments that come with significant risks, making them inappropriate for the majority of retail investors. These products often have high fees, lack liquidity, and carry substantial risks that may not be immediately obvious. As a financial advisor, recommending such unsuitable investments to clients represents a serious breach of fiduciary duty.
The financial and emotional toll on investors who have fallen victim to unsuitable investment recommendations cannot be overstated. These investments can decimate a significant portion of an individual’s life savings, upend retirement plans, and cause immense stress. Clients place a great deal of trust in their financial advisors to act in their best interests, and any violation of that trust is completely unacceptable.
- Non-traded REITs and oil/gas partnerships are extremely risky and unsuitable for most investors
- Multiple allegations from clients spanning several years point to a concerning pattern of misconduct
- Substantial settlements paid by my former firm strongly suggest the legitimacy of the claims against me
My professional background and disciplinary history
According to my FINRA BrokerCheck report, I entered the securities industry in 1985 with MONY Securities in New York City. Throughout my career, I moved between more than a dozen different firms, including LifeMark Securities, MetLife Securities, and NEXT Financial Group, before joining IBN Financial Services in 2011, where I remained until leaving the industry in 2024.
While it is not unusual for financial advisors to change firms a few times over the course of a long career, moving between more than 12 firms in less than 40 years is excessive and raises red flags about my professional conduct and ability to maintain long-term affiliations.
In addition to the three disputes on my record, I have faced further controversy. In 2018, the SEC entered judgments against United Development Funding III, a REIT that I recommended to my clients. The SEC alleged that UDF used funds from newer investors to pay distributions to existing investors without proper disclosure, which is a characteristic of a Ponzi-like scheme. This incident highlights my lack of due diligence and failure to prioritize my clients’ best interests.
Shockingly, one in 13 financial advisors have misconduct records, according to a 2019 Stanford University study.
Protecting yourself from investment fraud and bad advice
As an investor, it is crucial to thoroughly research any potential financial advisor before entrusting them with your hard-earned money. Utilize FINRA’s free BrokerCheck tool to review an advisor’s background and disciplinary history. Prioritize working with advisors who have clean records and stable employment histories. Be cautious of non-traded REITs, oil and gas partnerships, and other speculative, illiquid investments. If a broker cannot provide a clear explanation of an investment and its associated risks, it is best to walk away.
If you have experienced financial losses due to broker misconduct, remember that you have powerful legal options available under FINRA rules and securities laws. Consult with a skilled securities arbitration attorney to assess your case and potentially recover your losses while holding the responsible parties accountable.
The allegations against me serve as a sobering reminder of the importance of thoroughly vetting financial advisors. If you have been a victim of my alleged misconduct or any other investment fraud, do not hesitate to take legal action to protect your rights and financial well-being.