Florida Broker Fined and Suspended for Unsuitable Investment Recommendations
Victor Alan Lessinger (CRD #830821) is a previously registered securities broker. From October of 2012 to April of 2023, Mr. Lessinger was a representative of Colorado Financial Service Corporation in Boca Raton, Florida. He was recently fined and suspended by the Financial Industry Regulatory Authority (FINRA) for making unsuitable investment recommendations. Here, our Miami unsuitable investment lawyer provides a more detailed overview of the enforcement action.
FINRA Enforcement Action: Former Broker Victor Alan Lessinger
In October of 2024, FINRA took enforcement action against former Colorado Financial Service Corporation broker Victor Alan Lessinger. Mr. Lessinger was a representative located at the Boca Raton, FL branch office of this broker-dealer. Without admitting or denying any specific allegations raised against him, Mr. Lessinger consented to FINRA’s findings and its proposed penalties.
According to the allegations, Mr. Lessinger violated securities industry rules by advising that a retail investor enter into three high-risk closed-end management investment companies. She put nearly 40 percent of her net worth into these investments even though she reported that her risk tolerance was only “moderate” and she lacked significant experience or sophistication. As a part of the enforcement action, Mr. Lessinger agreed to the following penalties:
- Payment of full financial restitution to the client;
- A $5,000 civil financial penalty; and
- A three-month suspension from the securities industry.
Closed-End Management Investment Companies are Risky
Closed-end management investment companies are investment vehicles that raise a fixed amount of capital through an initial public offering (IPO) and then list a set number of shares on an exchange. They are actively managed by professionals who can invest in a wide range of securities.
Notably, unlike open-end funds, their share price can trade at a discount or premium to the fund’s net assets. As such, they can be inherently risky. They are often volatile. Further, many of these funds use leverage (borrowed money) in an attempt to enhance returns. That further drives up risk.
An Overview of FINRA Regulations for Suitable Investments (Suitability Rule)
Your broker has a legal and professional responsibility to ensure that any investment recommendations are suitable for your specific circumstances. Indeed, FINRA’s Suitability Rule (FINRA Rule 2111)). requires broker-dealers to ensure that they recommended securities or investment strategies are suitable for their customers’
- Personal investment objectives;
- Level of risk tolerance; and
- Overall financial circumstances.
Among other things, the regulation requires brokers and brokerage firms to conduct due diligence when analyzing clients. There are many relevant factors, such as age, financial situation, tax status, experience and investment goals. A broker can be held liable for unsuitable investment losses.
We Handle Unsuitable Investment Cases in Florida
At Carlson & Associates, P.A., we have the skills and experience to take on unsuitable investment cases. If you or your loved one suffered significant investment losses due to unsuitable investment recommendations, please do not hesitate to contact us today. With an office in Miami, we provide legal representation to investors in South Florida and beyond.
Source:
brokercheck.finra.org/individual/summary/830821