If you’re an investor looking to safeguard your assets, understanding the implications of financial misconduct may be paramount when selecting a financial advisor. This spans the spectrum from spotting red flags to knowing what to expect during a broker investigation. “An investment in knowledge pays the best interest,” Ben Franklin once said. Let’s put that wisely spoken principle into action by examining the recent case of Simon Hagos, a financial advisor previously registered with Fidelity Brokerage Services, who recently faced allegations of violating FINRA rules.
The Allegations Against Simon Hagos
In January 2025, Hagos was suspended by FINRA according to his BrokerCheck record (CRD #: 7199712). The allegations suggested that he maintained a securities account at another firm, without gaining written approval from his firm, Fidelity. As investors, it is essential to know the gravity of such accusations. Breaching company policy could indicate possible unprofessional conduct and might reflect negatively on the advisor’s integrity.
Hagos’ Background and Previous Complaints
Prior to the allegations, Hagos had a relatively smooth career. He previously worked for Fidelity Brokerage Services and Merrill Lynch, Pierce, Fenner & Smith. Passing essential exams, namely the General Securities Representative Examination – Series 7TO, the Securities Industry Essentials Examination – SIE, and the Uniform Combined State Law Examination – Series 66, served as testament to his expertise in the finance world.
Understanding FINRA Rules
To decode this, we need to understand a couple of provisions laid out by FINRA. FINRA Rule 3210 forbids brokers from opening an investment account with any non-associated brokerage unless there is the prior written consent of their firm. In turn, FINRA Rule 2010 holds brokers to high standards of commercial honor, just and equitable principles of trade. Violations of these guidelines not only go against the company’s policies but can also unfavourably influence the health of an investor’s assets, signaling potential risks one might want to avoid.
Consequences and Lessons
As a consequence of his alleged misconduct, Hagos received a two-month suspension and a $2,500 fine. The suspension, in effect from January 21 to March 20, 2025, serves as a solid reminder of the regulatory authority’s commitment to uphold a fair and safe marketplace for investors.
The lessons learned from this case remind us of the importance of diligent supervision and creditable relations in the financial services industry. Investing is not just about building wealth; it’s about building trust with financial advisors who are responsible for managing your financial wellbeing.
Did you know that 7% of advisors have misconduct records? That’s an alarming figure and another reason to remain informed and vigilant. By arming ourselves with knowledge, we can ensure that we choose advisors who not only help grow our wealth but maintain a high standard of integrity and professionalism – a crucial element in cultivating a successful investor-adviser relationship.
