Kentucky Unsuitability Law Firm

Our Lexington, Kentucky Unsuitability Law Firm Provide Investors With Experienced Representation

At Shepherd Smith Edwards and Kantas (investorlawyers.com), we can help you determine whether unsuitable recommendations played a part in your investment losses. You may have grounds for suing your broker-dealer for damages. Contact our Lexington, Kentucky Unsuitability Law Firm today to schedule your free case consultation.

Unsuitability is one of the most common legal grounds cited by investors when pursuing financial recovery from a broker-dealer. Financial advisors are required to only provide investing advice and make recommendations and transactions that are appropriate for each customer, given their particular investment goals, financial situation, age, investing time horizon, risk tolerance level, the rest of their portfolio, and other pertinent information about them. Unfortunately, this isn’t what always happens.

A Few Examples of What Unsuitability Can Look Like For Kentucky Investors 

• A broker recommends alternative investments to a novice investor who lacks the level of experience necessary to understand the risks they are agreeing to take on.
• A financial advisor decides to employ a high-risk trading strategy for his customers that ends up causing losses that could have been avoided if only a more moderate approach had been taken that was better suited for them.
• An accredited investor’s portfolio is filled with too many oil and gas investments by their broker. This leads to an overconcentrated account and serious losses when oil prices plunge in value.
• A stockbroker makes unauthorized trades in a customer’s account involving investments that were never approved by the broker-dealer. The investor loses money from these transactions.

The Financial Industry Regulatory Authority’s Rule 2111  Regarding Unsuitability:

The rule stipulates that brokerage firms and their registered representatives need to have reasonable grounds for thinking any strategy, transaction, or product they recommend is appropriate for the customer based on their investment profile. This involves:

Reasonable-basis suitability: There must be reasonable grounds for believing the investment is appropriate for at least some investors.

Customer-specific suitability: The recommendation by the financial advisor must be appropriate for the specific customer to whom it is being made.

Quantitative suitability: When there is a series of recommendation transactions, the broker needs to have reasonable grounds for believing the transactions are appropriate for the customer, even when taken together and given any turnover rate or cost-equity ratio.

In order to ensure suitability, a broker has to conduct the necessary due diligence not just into the investment or strategy they are recommending, but also about the essential facts involving each customer. See FINRA Rule 2090. Know Your Customer.

There is also the US Securities Best Interest (REG BI), which elevates the suitability standard for brokers. Prior to its implementation, the suitability requirement for financial advisors did not impose a fiduciary duty. Now, they owe customers a higher standard of care when it comes to suitability.

With Reg BI, brokers can no longer just meet the suitability standard; they must make sure the recommendations they make are in a customer’s best interests.

How Can Our Lexington, Kentucky Unsuitability Law Firm Help?

Shepherd Smith Edwards and Kantas has been representing investors for 35 years. This is the only kind of law that we practice. Over the decades, we have helped thousands of investors, including many Kentucky investors, to file unsuitability claims against a US brokerage firm.

Trust us when we tell you that you DO NOT want to go to your broker-dealer about unsuitability allegations. It is highly likely that they will deny your claim or even sabotage any case you might have against them.

Identifying when unsuitability has played a part in an investor’s losses can be difficult, which is why you need trusted Lexington unsuitable investment loss attorneys on your side. We have secured full or partial financial recovery for the majority of our clients. Our Kentucky securities law firm has the skills and experience necessary to take on even the most complex unsuitability claims against the largest brokerage firms, including those on Wall Street.

Contact Our Kentucky Unsuitability Law Firm Today:

Call (800) 259-9010 or (866) 931-7628.

216 E Reynolds Rd #C
Lexington, KY 40517