Dalas L. Gundersen, a former Registered Representative with the Willows, California branch of Edward Jones, submitted a letter of acceptance, waiver, and consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) sanction and findings that he made unsuitable investment recommendations to his customers in light of their financial goals.
FINRA’s findings alleged that Dalas Gundersen, of Arbuckle California, recommended that a married couple invest in an intermediate municipal bond mutual fund, even though the investor couple had inquired about investing in oil and gas master limited partnerships. According to FINRA, the couple acted upon Mr. Gundersen’s recommendation and purchased nearly $1.26 million in mutual fund, which represented 80% of their net worth.
According to FINRA, the investor couple complained to Edward Jones about the decline in value of their investment and sold the mutual fund investment, resulting in a loss of over $45,000 and nearly $12,000 in deferred sales charges. Edward Jones subsequently settled the couple’s complaint. Dalas Gundersen was assessed a deferred fine of $5,000, suspended for 10 days and ordered to pay back the commissions he received, plus interest.
Brokerage firms and their financial professionals have the responsibility, under FINRA Rule 2111, the “Suitability Rule,” to make suitable recommendations to investors. This rule lays out the three main suitability obligations requiring brokers to (i) perform due diligence to understand the risks of an investment or investment strategy, and determine whether it is suitable for anyone, (ii) have a reasonable basis for believing the investment or investment strategy is suitable for the particular customer based on that customer’s investment profile; and (iii) have a reasonable basis for believing that a series of securities transactions are not excessive (if the broker has control over the account).
Have you suffered losses in a mutual fund or excessively concentrated investment? Have you suffered losses in your Edward Jones or any other brokerage account due to unsuitable recommendations or the overconcentration of your investments by your broker? 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 and other financial professionals who may have engaged in misconduct and caused investors losses.
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 30 years, 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 visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.