Finra arbitrators ordered a former financial advisor to pay more than $600,000 for recommending risky options strategies for a group of Alabama investors.
The investors filed an arbitration claim in July 2021 against Norman Edgar McNeill and McNeill Financial Advisory. The causes of action included unsuitability; negligent misrepresentation and suppression; breach of contract; controlling person liability and violation of the Alabama Securities Act.
“The causes of action relate to allegedly improper investment in unsuitable and high-risk option investment strategies,” according to the award document posted Wednesday.
Finra has increased its scrutiny of options trading and disclosures. The broker-dealer self-regulator runs the arbitration system that adjudicates disputes between customers and brokerage — and sometimes between clients and investment advisors. But the regulator does not participate in deciding awards.
A three-person Financial Industry Regulatory Authority Inc. arbitration panel found McNeill and the firm liable and ordered them to pay the claimants $222,927 in compensatory damages; $74,300 in pre-award interest; $342,550 in attorneys’ fees; $24,723.6 in costs; and a $400 reimbursement for a filing fee. The total award was $664,901.47.
The claimants — Patricia Capps, Mary Martin, Terry Michael Wheeler, Wanda Wheeler, Raymond Capps and Clifford Capps— did not request a specific amount of damages in the claim. For instance, they asked for compensatory damages “in an amount to be determined by the arbitration panel.”
Some of the damages were awarded to the claimants for losses related to individual retirement accounts and some to nonqualified accounts. But damages also were denied to some nonqualified accounts.
As is typical in Finra arbitration awards, the arbitrators did not explain their decision. Attorneys for the investors and those representing McNeill did not respond to requests for comment.
McNeill has two regulatory disclosures on his Investment Adviser Public Disclosure database record.
“I dispute that the allegations have any merit or that I have any legal liability,” McNeill states in the IAPD in reference to the arbitration dispute that he lost this week. “I intend to defend this claim.”
He also denied a separate claim brought in November 2021.
McNeill is a previously registered investment advisor, according to the IAPD, which is maintained by the Securities and Exchange Commission. He worked for four firms over 18 years. He was most recently with McNeill Financial Advisory from 2017 to 2022.
A search under the Central Registration Depository number for McNeill Financial Advisory results in a message that no information can be found.
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.
It promised guaranteed principal and 10% monthly returns. The SEC says it invested nothing.
Ten years after entering the fee-based annuity market, MassMutual Ascend says nearly half its lifetime sales came in the past two years alone – but barriers remain among fee-only advisors.
Amplify, WealthReach, Zeplyn and Zocks have unveiled partnerships aimed at automating portfolio management, content creation, account opening, and client communication.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
