As a former financial advisor and legal expert with over a decade of experience, I’ve seen my fair share of investor complaints and regulatory actions. The recent complaint against Minneapolis financial advisor Robb Herje is a serious one that warrants attention from both the industry and investors alike.
According to FINRA records, the pending complaint alleges that as a representative of Northland Securities, Mr. Herje provided misleading information about unsuitable non-traded REIT investments, resulting in unspecified damages. This is not the first time Mr. Herje has faced such allegations. His BrokerCheck report reveals two prior investor complaints:
- A February 2022 complaint alleging unsuitable investment recommendations and over-concentration, settled for $59,500
- A 2019 complaint alleging unsuitable direct investments, settled for $122,500
These complaints raise red flags about Mr. Herje’s practices and the potential harm to investors. As a financial professional, it is crucial to always prioritize the client’s best interests and provide accurate, transparent information about investment risks and suitability.
Understanding the Advisor’s Background
Robb Herje holds 38 years of securities industry experience and has been a broker and investment advisor with Northland Securities and Northland Asset Management since 2002 and 2014, respectively. Prior to that, he was registered with Miller Johnson Steichen Kinnard, Miller Johnson & Kuehn, and Discount Brokerage Corporation of America.
While his profile on Northland Securities’ website touts his “35 years of experience as a fixed income investment consultant” and ability to “build portfolios that are both suitable and performance-driven,” the multiple complaints suggest a discrepancy between this portrayal and his actual practices.
Decoding the FINRA Rule Violations
The alleged misconduct in the complaints against Mr. Herje involves violations of FINRA rules related to suitability and misrepresentation. FINRA Rule 2111 requires brokers to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer based on their financial situation, risk tolerance, and investment objectives.
Misrepresenting investment risks or providing misleading information violates FINRA Rule 2020, which prohibits the use of manipulative, deceptive, or fraudulent devices in connection with the purchase or sale of securities.
Consequences and Lessons Learned
For advisors found to have violated FINRA rules, consequences can include fines, suspensions, or even permanent barring from the industry. Investors who suffer losses due to unsuitable or misrepresented investments may be able to recover damages through FINRA arbitration or legal action.
As Warren Buffett famously said, “Risk comes from not knowing what you’re doing.” This case underscores the importance of thoroughly researching and understanding the background and disciplinary history of your financial advisor. A startling fact: According to a 2019 FINRA study, nearly 1 in 10 brokers have at least one investor complaint or regulatory action on their record.
The lessons for investors are clear: conduct due diligence, ask questions, and if something seems too good to be true, it probably is. By staying informed and vigilant, you can better protect your investments and financial well-being.