Ah, yes, as Benjamin Franklin once wisely warned us: “An investment in knowledge pays the best interest.”
However, what happens when that investment turns sour due to unethical behavior by a financial advisor? I am here to share an alarming case of Paris Monte Lewis, a previously registered broker and investment advisor, and lesson that every investor should take to heart.
The Allegations and Their Implication to Investors
Paris Monte Lewis (CRD#: 2335964) is at the center of heated controversy and legal action. A customer dispute arose against him in September 2024, alleging unknown withdrawals from the customer’s variable annuity account starting from 2019. The loss? A staggering $150,000, plus extra charges for interest, fees, and costs. This is not the first time Mr. Lewis faced such allegations – he has had three other FINRA disclosures, with complaints regarding unauthorized withdrawals and violation of company policies.
Scenarios like these are the worst nightmare for any investor. Not only does it cause substantial financial loss, but it also disrupts one’s faith in the financial system. According to a study by the Certified Financial Planner Board of Standards, 54% of investors fear being defrauded. This fear is not unfounded, given cases like Mr. Lewis’s, and emphasizes why investors needs to be vigilant when choosing a financial advisor.
Context: The Financial Advisor’s Background and Track Record
Before diving into an analysis of Mr. Lewis’s alleged violations, it’s important to understand his background. Mr. Lewis started his career in the securities industry in 1994, working with well-known firms such as Metropolitan Life Insurance Company, Metlife Securities, Inc., and NYLife Securities, LLC. His career took a severe blow when he was discharged by two of these firms for failing to comply with their policies, setting a precedent to his existing controversy.
Understanding the FINRA Rule
Familiarising oneself with industry regulations is crucial in understanding cases like these. In this instance, FINRA Rules 2150 and 3240 apply. Rule 2150 safeguards a customer’s securities or funds from improper usage, while Rule 3240 restricts a financial advisor from borrowing money from their clients, with only a few exceptions. This rule is in place to prevent conflicts of interest and potential theft or misuse of client funds.
Consequences and Lessons Learned
The repercussions for both Mr. Lewis and his clients are severe. For Mr. Lewis, not only is his career on the line, but he also faces potential legal action and penalties. The clients, on the other hand, bear the brunt of his alleged actions, dealing with financial losses and the daunting task of recovering the invested amount.
This occurrence underlines the importance of thorough vetting before hiring a financial advisor or broker. Understanding their history, reputation, and approach to financial management can minimize the risk of falling victim to fraudulent schemes. And as this case shows, having knowledge about their previously registered broker’s and advisor’s FINRA BrokerCheck number can also be helpful, providing a resource for viewing any existing history of financial violations or complaints.
Remember, knowledge truly is the best investment you can make – especially when it comes to protecting your hard-earned money from bad financial advice.
