Customer Seeks $1M Over Harvest Volatility Management, Put Writing Strategy
Matthew Donald Babrick and James W. Wilcox, both First Republic Securities stockbrokers, have been named in a $1M Financial Industry Regulatory Authority (FINRA) arbitration claim against the firm over alleged losses from the Harvest Volatility Management Put Writing Strategy (Harvest PWS).
Wilcox, who is based out of Jackson, Wyoming, and Babrick, who is in Los Angeles, California, are also registered investment advisors with First Republic Investment Management, Inc.
The Harvest Volatility PWS uses the equity in a customer’s brokerage account and employs an overlay strategy that includes selling options on the S&P 500 index to make premium/income. Assets are brought into the program by Harvest Volatility Management on a discretionary basis. This means that investors are not told about transactions before they happen.
The claimant of this Harvest Volatility Management Put Writing Strategy investor claim believes that First Republic Securities and its registered representatives not only unsuitably recommended this program but also made misrepresentations and omissions about it.
Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) continues to investigate the many brokerage firms that may have unsuitably sold programs and products from Harvest Volatility Management, including Harvest PWS, CYES Strategy, and Call Writing Strategy. Contact our broker-dealer fraud lawyers today.
Brokers Purportedly Earned Commissions Twice Over From Harvest Volatility PWS
The claimant reportedly wanted to take on little, if any, risk and had prioritized preserving capital while also making money. Instead, Matthew Babrick and James W. Wilcox recommended the Put Writing Strategy, which they purportedly marketed as low risk, a source of consistent returns, and a program that would enhance yield by 5% without the customer needing to add more money into their brokerage account.
In fact, the Harvest Volatility Management PWS overlay strategy can be very high risk.
The customer contends that Wilcox and Babrick failed to disclose that not only would they be combining Harvest PWS with the investor’s fixed income securities, which would up the risks involved, but also a margin call could result.
Meanwhile, Harvest Volatility Management and First Republic Securities each charged management fees on the mandated amount. Also, the two brokers purportedly earned fees and commissions twice over, not just through the customers’ brokerage accounts that acted as collateral but for recommending the investment to the claimant.
Both First Republic Securities Brokers Have Previously Been Accused of Unsuitability
According to James Wilcox’s BrokerCheck Record, he has been in the industry for 20 years. Before joining First Republic Securities last year, he was a Goldman Sachs (GS) broker for 18 years.
There is one other customer dispute on his record, again involving First Republic Securities, that was brought on July 10, 2020. The client, alleging that from 2018 to 2020 an unsuitable trading strategy was recommended, is seeking $800K in damages.
Mathew Babrick’s BrokerCheck record appears to list the same customer dispute seeking $800K. An earlier investor claim from April 2020 seeking $854K in damages over a margin loan and an allegedly unsuitable investment strategy was denied.
Babrick has worked in the industry for 17 years. He also used to be a Goldman Sachs broker. Before that, he was registered with Merrill Lynch Penner and Smith.
Harvest PWS Investment Fraud Lawyers
SSEK Law Firm has helped thousands of investors to recoup their losses from the broker-dealers and their registered representatives that were responsible. We work with investors nationwide.
If you suffered losses in Harvest PWS while working with First Republic Securities brokers Mathew Babrick or James Wilcox or any other broker from the firm, we can help you explore your legal options. Call 800-259-9010.