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Did Former Herbert J. Sims & Co. Inc. Financial Advisor Alan Appelbaum Recommend Unsuitable Structured Products?

Posted on Wednesday, May 8th, 2019 at 1:07 pm    

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Erez Law is currently investigating former Herbert J. Sims & Co. Inc. financial advisor Alan Appelbaum (CRD# 500336) regarding over-concentrating investments in unsuitable structure products. Appelbaum has been registered with Aegis Capital Corp. in Boca Raton, Florida since 2015. Previously, Appelbaum was registered with Herbert J. Sims & Co. Inc. in Boca Raton, Florida from 2002 to 2015.

According to public records, a former client of Appelbaum and Herbert J. Sims & Co. Inc. filed a FINRA arbitration that alleged that Appelbaum over-concentrated his former clients investments in structured products. This strategy allegedly caused the unsophisticated investors to lose more than $200,000, which amounted to the majority of their investment.

It is alleged that the structured products offered high commissions for Applebaum, and bet on the steepness of the yield curve. It is also alleged that the investments had long-dated maturities that were unsuitable in terms of risk and duration for the investors who were looking for income-producing investments.

In July 2006, Appelbaum was sanctioned by the state of New Hampshire and ordered to pay a fine of $55,000. The state found that Appelbaum serviced eight brokerage accounts for New Hampshire residents, even though Appelbaum was not licensed to sell securities in New Hampshire.

In addition to the case above, Appelbaum has been the subject of 11 customer complaints between 2001 and 2015, two of which were denied, according to his CRD report. Recent complaints are regarding:

December 2015. “Allegations include failure to recognize claimants change in circumstances and desire to pursue a low risk conservative strategy, unsuitable trading in proprietary investments and structured products between the years of 2012 and 2014.” The customer sought $50,000 in damages and the case was settled for $20,000.

August 2014. “Client alleges breach of fiduciary duty, a failure to supervise, negligence, fraud, breach of contract and violation of NASD and FINRA rules.” The customer sought $350,000 in damages and the case was settled for $25,000.

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Herbert J. Sims & Co. Inc. may be liable for investment or other losses suffered by Appelbaum’s customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.