Erez Law is currently investigating former Caldwell International Securities financial advisor Alex Etter (CRD# 2981742) regarding unsuitable recommendations of an active trading investment strategy to his customers. Etter was registered with Caldwell International Securities in Englewood Cliffs, New Jersey from 2011 to 2016.
Caldwell International Securities was ordered to pay $2 million regarding charges that the firm harmed investors who lost money as a result of excessive trading and churning in customer accounts; the broker-dealer founder Greg Caldwell agreed to an industry ban as part of the settlement.
Etter was suspended from FINRA from October 2016 to October 2018 following an investigation that alleged that he and other firm representatives at Caldwell International Securities made unsuitable recommendations of an active trading investment strategy to their customers. The firm was liable for the unsuitable recommendations of an active trading investment strategy made by them under the doctrine of respondeat superior because each representative was an agent of the firm acting within the scope of his duties when he engaged in this misconduct. FINRA expelled the firm in January 2017.
According to the FINRA complaint, Etter and other registered representatives made “recommendations despite the fact these representatives failed to understand the risks of the investment strategy being recommended, or the impact the staggering commissions and fees generated by this active trading investment strategy would have on their customers’ accounts.” The complaint further alleges that the representatives had “no reasonable basis to recommend such a strategy to their customers. As a result of the recommendation of an unsuitable active investment trading strategy, Etter and the other representatives customers’ accounts suffered over $1.1 million in realized trading losses while paying over $1 million in commissions and fees. The complaint further alleges that Etter failed to identify customer complaints and none of these complaints were reported to FINRA in accordance with applicable rule.” It is also alleged that Etter did not conduct any due diligence into the investment strategy that he was recommending for the 15 clients which he recommended investments, and he did not review the results of his strategy over time and modify his recommended strategy based on the costs to the customer accounts.
Etter was sanctioned to civil and administrative penalties/fines in the amount of $10,000 plus disgorgement in the amount of $227,395.45 and restitution in the amount of $6,509.99.
Etter was also the subject of three customer complaints, one of which was closed without action and two were denied, according to his CRD report.
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, Caldwell International Securities may be liable for investment or other losses suffered by Etter’s customers.
Erez Law represents investors in the United States for claims against former Caldwell International Securities financial advisor Alex Etter regarding unsuitable recommendations of an active trading investment strategy to their customers. If you were a client of Caldwell International Securities or another firm, 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.