Allegation’s Seriousness, Case Information, and its effects on Investors
Many investors place utmost trust in their brokers, expecting that these professionals will act on their best interests. Unfortunately, as the case of Vince Lagatta (CRD #:3098611), an advisor with Osaic Wealth, illustrates, this trust can sometimes be misplaced.
In June of 2024, an investor alleged that Lagatta purchased a three-year buffered structured note on their behalf. Once this note matured, it was observed that one of the underlying stocks fell beneath the buffer amount, leading to a principal loss. The investor further asserted that Lagatta misrepresented the terms and provisions of the note, resulting in a poor performance of the structured note.
As Warren Buffet so concisely put it, “Risk comes from not knowing what you’re doing.” This saga underscores the need for vigilance and thorough understanding when dealing with complex financial securities.
The Financial Advisor’s Background, Broker Dealer and any Past Complaints
A peek into Vince Lagatta’s profile reveals an advisor with a string of associations with nine firms over a 25-year span. Currently a broker registered in ten states and a registered investment advisor in Arizona, his associations raise a few eyebrows.
Lagatta’s affiliations span coverage with companies including Osaic Wealth, PNC Investments, PNC Managed Account Solutions, BBVA Securities, and CitiCorp Investment Services, to name a few. It is noteworthy that during his quarter-century long career, Vince Lagatta has managed to weather the storm with several associations, raising some serious due diligence concerns in the minds of seasoned investors.
Explanation in Simple Terms and the FINRA Rule
FINRA Rule 2020 prohibits the manipulation or fraudulent influence in the buying or selling of securities. In that light, any misrepresentation or omission of significant material facts is considered a serious violation of the rule. Good intent or the absence of it cannot be taken as defense under this rule.
Simply put, advisors like Lagatta are required to provide all the significant information relevant to an investment, and ensure that they avoid fraudulent, manipulative or deceptive ways to influence decisions. Any misrepresentation or omission is a direct violation of those expected standards.
Consequences and Lessons Learned
The incidence with Lagatta teaches investors to be ever vigilant. Over 1 in 13 financial advisors have been found guilty of being fraudulent, deceptive, or manipulative, making it crucial to perform a preliminary background check before investing. With the plethora of information at hand, we as investors need to take that extra initiative to safeguard our hard-earned money.
All too often, investors fall prey to the scheme of things, blinded by the lure of high returns and fail to fully understand the intricacies that run beneath these seemingly attractive investment plans. A thorough understanding, straightforward conversations, and unequivocal representations are the rights every investor holds, and thus, it is key to require these from our chosen financial advisors.
Remember, in the world of finance, what you don’t know can hurt you.
