Jeff Larson (CRD #: 4836889), a former broker registered with Arete Wealth Management, finds himself embroiled in two SEC actions, according to his BrokerCheck record, accessed on February 17, 2025. The allegations against Larson have sent shockwaves through the investment community, leaving many investors questioning the integrity of their financial advisors and the systems in place to protect their investments.
Investment fraud and bad advice from financial advisors are not uncommon. In fact, a report by Bloomberg found that FINRA, the self-regulatory organization overseeing brokers, often fails to hold bad actors accountable for their actions. This lack of accountability can lead to repeated offenses and significant losses for investors.
Allegations, facts, case information, and impact on investors
The SEC’s allegations against Jeff Larson are serious and far-reaching. According to the regulatory action filed on January 17, 2025, Larson is accused of:
- Misrepresenting investment risks to clients
- Engaging in unauthorized trading
- Failing to disclose material conflicts of interest
These allegations, if proven true, constitute a grave breach of trust between Larson and his clients. Investors who have entrusted their hard-earned money to Larson’s management are now left wondering about the security of their investments and the potential impact on their financial futures.
The SEC’s civil suit, filed in federal court on February 1, 2025, seeks to recover ill-gotten gains, impose civil penalties, and bar Larson from future violations. The outcome of this case could set a precedent for how similar cases are handled in the future, and may lead to increased scrutiny of financial advisors and their practices.
As famed investor Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it.” The allegations against Larson serve as a sobering reminder of the importance of due diligence when selecting a financial advisor.
Financial advisor’s background, broker dealer, and past complaints
Jeff Larson’s background in the financial industry spans over a decade. He was registered with Arete Wealth Management from 2018 to 2024, and previously held positions at several other firms, including LPL Financial and Wells Fargo Advisors.
A closer look at Larson’s BrokerCheck record reveals a troubling history of customer complaints. Prior to the current SEC actions, Larson had been the subject of three customer disputes, all of which alleged misrepresentation, unsuitability, and unauthorized trading. Two of these disputes were settled, while one remains pending. Investors who have suffered losses due to broker misconduct can find valuable resources and support at Financial Advisor Complaints.
Explanation of FINRA rule violations
The allegations against Larson involve violations of several FINRA rules designed to protect investors. These include:
- FINRA Rule 2020, which prohibits the use of manipulative, deceptive, or fraudulent devices
- FINRA Rule 2111, which requires brokers to have a reasonable basis for believing that an investment recommendation is suitable for a particular customer
- FINRA Rule 3260, which requires brokers to obtain written authorization from customers before engaging in discretionary trading
These rules are in place to ensure that financial advisors act in the best interests of their clients and do not engage in unethical or illegal practices. Violations of these rules can result in disciplinary action by FINRA, as well as civil and criminal penalties.
Consequences and lessons learned
The consequences of Larson’s alleged actions are far-reaching. For the clients who have suffered financial losses, the road to recovery may be long and uncertain. The reputational damage to Arete Wealth Management and the broader financial industry is also significant, as cases like this erode public trust in financial institutions.
However, there are important lessons to be learned from this case. Investors must remain vigilant and proactive in monitoring their investments and the activities of their financial advisors. Regular review of account statements, asking questions, and staying informed about market conditions can help investors identify potential red flags.
Furthermore, the financial industry must continue to prioritize transparency, accountability, and the highest ethical standards. Stronger oversight, more robust training programs, and a culture that encourages reporting of wrongdoing can help prevent cases like Larson’s from occurring in the future.
As we await the resolution of the SEC’s actions against Jeff Larson, it is a sobering reminder that even in a highly regulated industry, bad actors can slip through the cracks. By staying informed, engaged, and proactive, investors can protect themselves and their financial futures.
Did you know? According to a study by the University of Chicago, approximately 7% of financial advisors have a history of misconduct, and those with past offenses are five times more likely to engage in future wrongdoing.
