As someone deeply entrenched in the financial industry and an avid writer on financial matters, I’ve always known that transparency and ethics are the bedrocks of trust between financial advisors and their clients. I recently encountered a case that underscores this fundamental concept—Michael Delao’s alleged violations while registered with St. Bernard Financial Services.
The transgressions center around Delao’s delay in reporting a felony charge filed against him in March 2019. It took until September 2022 for Delao to disclose this critical information on his Form U4.
Navigating the Legal Implications of Delao’s Disclosure Failure
Let me take you through the facts. Michael Delao, unfortunately, found himself accused of a serious crime in March 2019. This charge was later reduced to a Class 1 Misdemeanor and then dismissed in June 2021. A sigh of relief, you might think. But the problem didn’t end there, as Delao fell short of his obligations under both St. Bernard’s internal policies and the Financial Industry Regulatory Authority’s (FINRA) standards set forth in Rule 2010.
During St. Bernard’s annual compliance reviews from 2019 to 2022, Delao outright denied any unreported arrests or convictions, breaching Sec. 115.9(a)(2) of their Board Rules. This doesn’t just contradict company policy; it’s a stark violation of the principle of upholding high standards of commercial honor and fair trading practices demanded by FINRA.
The Ripple Effect on Investors and the Industry
You might wonder why such cases should matter to an average investor. Well, as Warren Buffett once mused, “It takes 20 years to build a reputation and five minutes to ruin it.” This incident matters because a financial advisor’s integrity is vital for investor trust. A fraudulent declaration or significant omissions can tarnish the entire system upon which investor confidence is built, spawning potentially devastating consequences.
Moreover, blunders like these don’t just stain the reputation of the individual; they can also tarnish the credibility of the broader financial industry, calling into question its collective trustworthiness.
Spotting Red Flags and Shielding Your Investments
Can investors do something to protect themselves and possibly recoup losses from such incidents? Absolutely. Stay vigilant for warning signs such as inconsistencies in the records, unexplained losses, or non-disclosure of critical events by your advisor. Being alert to these could lead you to pursue action, such as FINRA Arbitration, when necessary.
To empower investors in dealing with Delao’s situation, the renowned investment fraud law firm Haselkorn & Thibaut, with their impresive success rate, offer free consultations. They stand by their “No Recovery, No Fee” commitment, which can be reassuring for many.
If you wish to review Delao’s or other financial advisors’ records, FINRA BrokerCheck provides an accessible and reliable resource. Always check your advisor’s FINRA’s CRD number to make informed decisions about who manages your money.
To encapsulate, if there’s one takeaway from Michael Delao’s alleged violations, it’s this: We, as investors, must maintain vigilance over our financial affairs and the conduct of those we entrust with our assets. Prioritize relationships with financial advisors who are not only skilled but are unyielding in their commitment to ethical conduct and fair practice.
Remember, a good financial advisor is more than just the key to potential wealth growth; they should also be the guardian of our financial integrity. So it’s up to you to ensure that your financial future is in the right hands by choosing advisors wisely and checking their backgrounds, for instance, by verifying a financial advisor’s FINRA CRD number. After all, knowledge is power, and in finance, it is also your best defense.
The Disturbing Truth About Financial Advisors to Be Aware Of
Let me share a financial fact to ensure you’re fully informed: Did you know that according to a report by the Wall Street Journal, over 1,600 financial advisors have records of misconduct, yet still continue to manage investments? This highlights the essential need for diligent research into your financial advisor’s background and practices.
The unfolding of Michael Delao’s case is a stark reminder of the importance of ethical standards in the financial industry. It’s not only a legal obligation for financial advisors but also a cornerstone of trust with clients. As you embark on or continue your investment journey, let this case be your guide to taking a proactive stance in protecting your financial wellbeing and seeking out advisers who are dedicated to maintaining the highest standards of integrity.
Shocking Truth About Michael Delao from St. Bernard Financial Services Inc. Unveiled
