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.
A Texas-based bank selects Raymond James for a $605 million program, while an OSJ with Osaic lures a storied institution in Ohio from LPL.
The Treasury Secretary's suggestion that Trump Savings Accounts could be used as a "backdoor" drew sharp criticisms from AARP and Democratic lawmakers.
Changes in legislation or additional laws historically have created opportunities for the alternative investment marketplace to expand.
Wealth managers highlight strategies for clients trying to retire before 65 without running out of money.
Shares of the online brokerage jumped as it reported a surge in trading, counting crypto transactions, though analysts remained largely unmoved.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
