Erez Law Files Claim for Against Raymond James Financial Services, Inc. Broker Alberto Valdes Who Allegedly Sold Northstar
Posted on Monday, September 20th, 2021 at 8:37 pm
Erez Law recently filed a FINRA arbitration against Raymond James Financial Services, Inc., regarding investments in Northstar Financial Services (Bermuda) Ltd., a Bermuda-based annuity and life insurance company that serves the needs of high net worth clients around the globe.
Their customer alleges that Alberto Valdes (CRD #4378138), who has been a registered representative of Citigroup Global Markets Inc. in Miami, Florida since 2018, recommended he invest in an unsuitable offshore investment. Previously, Valdes was registered with Raymond James Financial Services Advisors, Inc. in Miami, Florida from 2016 to 2018.
The Erez Law client, who was a Wells Fargo customer that moved to Raymond James Financial Services, Inc., alleges the following in the newly filed FINRA claim:
The Erez Law client was primarily interested in preserving his principal. Valdes recommended that the client invest $300,000 in Northstar Global Advantage Select, an offshore investment. Specifically, Valdes recommended that the client invests in three Northstar Global Advantage Select with staggered maturities of three, five, and seven years.
Regrettably for the client, Valdes provided illustrations to him that reflected the low-interest rates paid by Northstar Global Advantage Select between 2.4% and 3.5% as well as the ending contract values of the three investments with the promised return. However, the Northstar Global Advantage Select investment that Valdes solicited paid a meager level of interest.
It is alleged that despite his known risk aversion, interest in a low return in order to protect his capital and his lack of sophistication, Valdes recommended the high risk and unsuitable Northstar Global Advantage Select. Valdes did not offer any other alternatives that could have easily preserved the client’s principal. This high-risk and unsuitable investment strategy only served to further increase the risks to which the client was unknowingly exposed. By failing to recommend adequate diversification, the client’s investment was subject to concentration risk and one negative event could and in fact did disproportionately negatively impact his investments.
Brokerage firms such Raymond James Financial Services are required to perform due diligence on the investments they approve for sale to their clients to ensure that the investment is suitable for its clients and that Raymond James Financial Services and its brokers understand the risks of the investment. Raymond James Financial Services failed its due diligence obligations by approving Northstar for sale as a low-risk investment that preserved capital without making adequate disclosures of the risks of loss.
It is alleged that Raymond James Financial Services and Valdes failed to adequately disclose to the client that there was a risk that his principal would not be returned to him. In fact, Valdes allegedly represented the exact opposite. Amongst other things, Raymond James Financial Services and Valdes failed to disclose to the client that they recommended an offshore investment that lacked the protections attendant to U.S. based investments. Neither Raymond James Financial Services nor Valdes disclosed in any meaningful manner to the client that his capital was at risk at all.
According to the claim, one possible explanation for Raymond James Financial Services and Valdes’ solicitation of Northstar Global Advantage Select is that the brokerage firm and Valdes may have received a high level of commissions for the sale of the investment.
Unfortunately, this is not an isolated incident. Raymond James Financial Services and Valdes have been actively selling Northstar investments to investors that were seeking safe investments and have now come to learn that they may have lost most or all of their investment.
In addition to the case above, Valdes has been the subject of one additional customer complaint in 2017 that was denied, according to his CRD report.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you 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.