Michael P. Spolar Faces Charges of Investment Unsuitability
Michael Patrick Spolar is currently employed by International Assets Advisory LLC. He was previously registered with LPL Financial LLC, Morgan Stanley, Merrill Lynch, Citigroup, and Lehman Brothers. He has been registered since 1991.
According to Financial Industry Regulatory Authority (FINRA) records, a total of 11 disclosures have been reported about Michael Spolar from 2003 to 2017, including one regulatory event, one financial disclosure, eight customer disputes and one termination.
Michael Spolar has reportedly settled six disputes over allegations of unsuitability of investment recommendations, unauthorized trading, misrepresentation, and breach of fiduciary duty. These settlements were in the following amounts: $450,000, $140,000, $70,000, $40,000, and $30,000.
The two customer disputes that are still pending also involve allegations Michael Spolar recommended unsuitable investments and engaged in unauthorized trading.
Michael Spolar was reportedly discharged from LPL Financial in 2015 over allegations he violated the firm’s policy by engaging in discretionary trading in brokerage accounts. According to FINRA documents, he obtained verbal authority to conduct trades but completed the transactions in the days after he received the verbal authority. This type of discretionary trading was reportedly prohibited by LPI Financial.
In April 2017, FINRA initiated regulatory action against Michael Spolar over allegations that he exercised discretion in non-discretionary accounts without obtaining proper permission to do so. That action is pending.
What Is Unsuitability?
The term “unsuitability” refers to a stockbroker’s failure to abide by New York Stock Exchange Rule 45, which is often called the “Know Your Customer” rule. Stockbrokers are responsible for getting to know the investor’s specific financial situation, needs, and goals. They must also consider an investor’s risk tolerance before making an investment suggestion.
In addition to considering the investor’s unique situation, a stockbroker must also research an investment before offering it as a recommendation to determine whether it will be a suitable investment for the particular customer.
It is important to note that an investor’s situation may change in the future, so what may be a suitable investment at one point in time may no longer be suitable at a future date. The stockbroker must account for the investor’s current situation and goals when determining the suitability or unsuitability of a particular investment.
When a stockbroker fails to adequately research an investment or consider a customer’s situation, the stockbroker is more likely to recommend unsuitable investments. If these investments cause the customer to suffer financial losses, the stockbroker may be liable.
Proving an unsuitability claim requires an investor to prove that the transaction took place, that the investment was not appropriate for the investor’s situation, and that the investment caused the customer to lose money.
Did You Lose Money Due to Stockbroker Misconduct?
If you believe your stockbroker invested your money in unsuitable accounts, you may have a legal claim. The investment fraud lawyers at Meyer Wilson have experience reviewing, investigating, and litigating claims of unsuitability and other types of stockbroker misconduct. Contact us today for a free case evaluation.