The Wolper Law Firm Files Two More Arbitration Claims Against Raymond James On Behalf Of Customers Who Were Targets Of Former Financial Advisor, Steven Reznick’s, Speculative Investment Strategy
Steven Reznick a/k/a Steve Reznick (CRD # 1067199) was a Financial Advisor at Raymond James Financial Services in Tallahassee, FL. Steven Reznick a/k/a Steve Reznick has been in the securities industry since 1982 and previously worked at PEBSCO Securities Corp. Steven Reznick a/k/a Steve Reznick worked as part of a team with his partner, Jason Brienen.
The Wolper Law Firm has been retained by multiple customers of Steven Reznick a/k/a Steve Reznick, who experienced large investment losses as a result of Steven Reznick a/k/a Steve Reznick’s recommendation that they invest in an over-concentrated portfolio of pharmaceutical and biotechnology stocks, including but not limited to, Celgene, Intrexon Corp., Achaogen, Inc., Acadia Pharmaceuticals, Ziopharm Oncology, Inc., Mylan, Perrigo Company, Receptos, Inc., and Alexion Pharmaceuticals.
In addition to Steven Reznick a/k/a Steve Reznick recommending the purchase of individual pharmaceutical and biotechnology stocks, he also recommended an options overlay strategy. The options strategy involved the purchase of long and short calls and puts in many of the same pharmaceutical and biotechnology stocks. In some instances, the options were uncovered, or naked options, exposing the customers to extraordinary risk.
Portfolios concentrated in a single sector or asset class are speculative. The risk in these portfolios was further enhanced through the implementation of the options strategy.
In total, Steven Reznick a/k/a Steve Reznick is the subject of twenty (20) customer complaints, including six pending complaints. Nineteen of these complaints were filed between 2017-2019. Among the complaints filed include the following:
- July 2019—”Negligence and violation of FINRA Rules 2110, 2310, 2120, 2330 and 2111, Breach of Contract, Negligent Supervision, Breach of Fiduciary Duty and Violation of Florida Statute §772.11(1) (Elder/Disabled Financial Exploitation). 08/18/199-10/31/2018.” Alleged damages are $120,000 and the matter remains pending.
- March 2019—”Overconcentration, Unauthorized Trading, Negligence, Breach of Contract, Negligent Supervision, Breach of Fiduciary Duties and Violation of FINRA Rules 2110, 2310, 2120, 2330 and 2111.” Alleged damages are $60,000 and the matter remains pending.
- March 2019—”Unsuitability, Overcentration, Breach of Fiduciary Duty, Negligence, Negligent Representation, Intentional Misrepresentation, Negligent Supervision, Breach of Contract.” The matter was settled for $275,000.
- March 2019—”Negligence; Breach of Contract; Negligent Supervision; Breach of Fiduciary Duty.” Alleged damages are $500,000 and the matter remains pending.
- January 2019—”Negligence and Violation of FINRA Rules 2110,2310,2120,2330 and 2111; Breach of Contract; Negligent Supervision; and Breach of Fiduciary Duty. 6/11/09 – 9/28/18.” Alleged damages are $100,000 and the matter remains pending.
- December 2018—”Suitability, Overconcentration, Unauthorized Trading, Negligence and Violation of FINRA Rules 2110, 2310, 2120, 2330 and 2111, Breach of Contract, Negligent Supervision and Breach of Fiduciary Duty. 9/26/16 – 10/31/18.” The matter was settled for $65,000.
- September 2018—”Misrepresentations and omissions relating to unauthorized trades, fraud, breach of fiduciary duty, failure to supervise, negligence, gross negligence, negligent retention, negligent misrepresentation, concentration, and respondeat superior liability. 3/25/15 to 9/13/18.” The matter was settled for $145,000.
For a copy of Steven Reznick a/k/a Steve Reznick’s CRD, click https://brokercheck.finra.org/individual/summary/1067199#disclosuresSection.
Making suitable investment recommendations is the cornerstone of proper investment advice. All brokerage firms and financial advisors have a duty to recommend suitable investments that are consistent with the needs and objectives of the investor. Brokerage firms and financial advisors must learn all material facts about an investor before making any recommendations and must match all investments with a customer’s stated investment profile. Failure to recommend suitable investments may result in a claim to recover attenuating investment losses.
FINRA has defined the standards in which investment recommendations made by brokerage firms and registered financial advisors are evaluated. The FINRA suitability rule focuses on three fundamental concepts: (1) reasonable basis suitability, (2) quantitative suitability, and (3) customer-specific suitability.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.
Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s:
- Other investments
- Financial situation and needs
- Tax status
- Investment objectives
- Time horizon
- Liquidity needs
- Risk tolerance
- Any other information disclosed by the customer
Failure by a financial advisor to adhere to these requirements is evidence of negligence or, worse, investment fraud. If you as the investor can establish, at a minimum, negligent misconduct, you may be entitled to recovery your investment losses.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org.