Ascendiant Capital Markets, LLC (“Ascendant”) has been reported to FINRA for allegedly not reporting a customer complaint against one of its financial advisors on time. The customer filed an arbitration claim against the firm and the financial advisor. However, the firm disregarded the customer’s claim and failed to act.
The customer contacted the firm stating that the financial advisor had made unauthorized trades in his brokerage account. He claimed that the damages were over $5,000, and he wanted to settle the dispute in arbitration. Ascendiant ignored the customer’s claim by not responding or reporting it to FINRA.
Despite a duty to report the complaint, Ascendiant made no effort to do so. The firm was required to update the financial advisor’s Form U4 to reflect the customer complaint shortly after receiving it. However, the firm delayed its responsibility, and did not update it until four months later. By not updating the financial advisor’s Form U4 to reflect the customer’s complaint against him, the firm misrepresented the quality and character of the financial advisor. Furthermore, the firm was obligated to notify FINRA of the customer complaint on a specified date, but was a month late in doing so.
Ascendiant’s failure to report the complaint and update the Form U4 were in part due to its faulty written supervisory procedures. Its policies provided no guidance for ensuring reports were timely filed. Furthermore, no procedures were in place to make certain that financial advisors were keeping their information current on Form U4.
FINRA requires financial advisors to fill out a Form U4 so that it can monitor them and ensure that they are approved to work in the securities industry. The Form U4 also informs firms on whether it should hire the applicant. Additionally, any disclosures of misconduct on the form are accessible to investors on BrokerCheck, and may help an investor decide who to hire.
Ascendiant failed to keep procedures in place to prevent the untimely updating and filing of forms. By neglecting the customer complaint, failing to file the Form U4, and failing to notify FINRA, Ascendiant has violated many FINRA rules. Ascendiant has shown a disregard for investors’ best interests. The firm deprived customers of accurate information needed to make informed decisions about which stock broker to seek advice from. Furthermore, the firm ignored the customer complaint, and failed to report it to FINRA.
If you have made complaints to your brokerage firm and have been ignored, or you are concerned that the firm is not updating information on its financial advisors, you may have a claim. Contact Investor Defense Law to see if you can recover your losses.
Investor Defense Law LLP is a law firm dedicated to helping investors in California, Georgia, and Washington recover losses caused by stockbrokers, financial advisers, or investment firms. To learn more, contact an investment fraud attorney at 800.487.4660.