On May 20, 2024, LPL Financial terminated Ross Fabregas (CRD #: 4370315) following allegations of serious misconduct. According to his FINRA BrokerCheck record, Fabregas allegedly participated in private securities transactions without notifying or receiving approval from LPL Financial. This behavior violates FINRA Rule 3280, which prohibits registered representatives from engaging in private securities transactions without prior written notice to their member firm.
As an experienced financial analyst and legal expert, I recognize the gravity of these allegations. Investors who have worked with Fabregas may be concerned about the potential impact on their investments. It’s crucial for affected investors to stay informed and consider their legal options, as unauthorized private securities transactions can expose them to significant financial risks.
Fabregas’ background in the financial industry spans over a decade. He has been registered with several broker-dealers throughout his career, including:
- LPL Financial LLC (2017 – 2024)
- Wells Fargo Advisors, LLC (2011 – 2017)
- Morgan Stanley Smith Barney (2009 – 2011)
Prior to his termination from LPL Financial, Fabregas had one disclosed customer complaint on his record from 2019, alleging unsuitable investment recommendations. This complaint was settled for $75,000.
FINRA Rule 3280, also known as the “Selling Away” rule, is designed to protect investors from unauthorized transactions conducted by their financial advisors. When registered representatives engage in private securities transactions without their firm’s knowledge or approval, it can lead to a lack of oversight and potentially expose investors to unsuitable or fraudulent investments.
The consequences for financial advisors who violate FINRA Rule 3280 can be severe, including termination from their firm, regulatory fines, and even permanent barring from the securities industry. As for the lessons learned, investors should always:
- Verify their financial advisor’s background using FINRA’s BrokerCheck tool
- Ask questions about any proposed investments and ensure they align with their risk tolerance and financial goals
- Report any suspected misconduct to their financial advisor’s firm and the appropriate regulatory authorities
As the famous investor Warren Buffett once said, “Risk comes from not knowing what you’re doing.” By staying informed and diligent, investors can better protect themselves from the potential consequences of working with unethical financial advisors.
It’s worth noting that, according to a study by the University of Chicago, approximately 7% of financial advisors have misconduct records, and this misconduct is often repeated. Investors must remain vigilant in researching and monitoring their financial advisors to safeguard their investments and financial well-being.
