Brian Harris Brunhaver, a former Snohomish, Washington-based registered principal employed by Boston, Massachusetts-based LPL Financial LLC, was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he used an unauthorized email account to communicate with customers and his assistant regarding his securities business. The complaint alleges that LPL Financial issued an adviser alert informing its registered representatives that they would be required to use either a firm-provided email address or an address approved by its compliance officers hosted with a firm-approved email host vendor. However, Mr. Brunhaver allegedly used both his firm-provided email address and a personal email account following the adviser alert for business communications without obtaining his firm’s permission. Mr. Brunhaver also allegedly allowed his assistant to use her personal email account for business communications.
The complaint also alleges that Mr. Brunhaver made false statements and induced the purchase of a security by means of a manipulative, deceptive, and/or other fraudulent device in email messages sent from his personal email account to a customer regarding a non-traded REIT. In those messages, Mr. Brunhaver allegedly informed the customer that her principal investment in the non-traded REIT would be guaranteed, that the investment did not involve any risk, and that she could not possibly lose her money if she invested. The customer invested $114,300 in the non-traded REIT and incurred a loss as a result of Mr. Brunhaver’s alleged practices.
The complaint further alleges that Mr. Brunhaver also sent a blast email message containing false statements regarding the non-traded REIT to an unknown number of existing retail customers from his personal email account. The messages allegedly provided information regarding the non-traded REIT, but allegedly did not disclose the substantial risks of the investment, were not fair and balanced, and contained false, exaggerated, and unwarranted or misleading statements.
As a result of the foregoing alleged events, Mr. Brunhaver allegedly violated his firm’s policies, FINRA and SEC rules, and prevented his firm from reviewing his business-related email communications, which is required by NASD rules governing supervision. Mr. Brunhaver also allegedly prevented his firm from its obligation to maintain and preserve business-related communications under SEC rules.
Stockbrokers, registered representatives, and other financial industry personnel have been known to engage in many types of fraud and other violations of industry rules, practices, and procedures. In order to protect customers from broker misconduct, FINRA rules require broker-dealers to establish and implement a reasonable supervisory system. The implementation of the rules requires supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors do not establish and implement such protective measures, they may be a liable to account holders for damages flowing from the misconduct. As a result, account holders who have suffered losses stemming from false written and/or verbal communications, deceptive and manipulative practices, and/or other types of misconduct by their broker or registered representative can bring forth claims to recover damages against broker-dealers like LPL Financial, which have a duty to oversee its employees in order to prevent these types of stockbroker misconduct.
Have you suffered losses in your investment account due to your registered representative or stockbroker’s misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against stockbrokers for unsuitable recommendations, misrepresentations, and/or other unauthorized and illegal conduct.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over , Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at email@example.com, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.