One of the fundamental rules of financial advising is ensuring that recommended investments are suitable for an individual's age, risk tolerance and financial needs. An elderly investor who needs access to money for living expenses has different financial needs and risk tolerance than a 30-year-old investor looking to make some extra money. The elderly investor does not have time to recover from substantial losses and could be in dire straights if too much money is held up or lost to investments.
Each person has different investment needs, which is why each person should be given unique investment suggestions. Not everyone will have the same investment portfolio. But, according to a Financial Industry Regulatory Authority (FINRA) arbitration claim, William Tatro invested his clients' assets in a similar manner.
"With a reckless disregard of the 'know your customer rule,' Tatro eventually developed a program where he invested most, if not all, of his clients in the same or similar way," the complaint reads. "At all relevant times, Tatro's primary objective was to generate commissions for himself and Respondents."
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The claimants further allege Tatro told them that their investments were safe, secure and low risk while not telling them about the lack of liquidity and lack of tax benefit of some the investments. According to the complaint, sale of even one annuity to the complainants would have been a violation of FINRA regulations, yet in one case he sold the investor three annuities.
The complainants allege Tatro carried out unauthorized transactions, and breached his contract and his fiduciary duty to investors. They seek recovery of losses incurred as a result of his actions.