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Berthel, Fisher & Company Financial Services, Inc. Broker Farrukh Kazmi Accused of Unsuitable Investment Recommendations

Posted on Wednesday, December 2nd, 2020 at 8:38 pm    

Berthel, Fisher & Company Financial Services, Inc.

Erez Law is currently investigating Berthel, Fisher & Company Financial Services, Inc. broker Farrukh Kazmi (CRD# 2855915) regarding unsuitable investment recommendations. Kazmi has been registered with Berthel, Fisher & Company Financial Services, Inc. in Moorestown, New Jersey since 2010. 

In August 2018, FINRA sanctioned Kazmi to a $20,000 civil and administrative penalty and fine, $10,350.71 in disgorgement, and a five-month suspension after he was named a respondent in a FINRA complaint alleging that he “regularly used instant messaging and text messaging to communicate with his member firm’s customers to conduct securities business and by doing so, he violated the firm’s written procedures and ignored its explicit instruction that he discontinue using instant messaging to communicate with his customers.” The FINRA complaint alleges that “Kazmi did not inform his firm that he used text messaging or instant messaging to conduct securities business, nor did he provide copies of these communications to the firm. In doing so, Kazmi prevented the firm from reviewing and retaining correspondence with the public, and making and preserving books and records. The complaint also alleges that Kazmi exercised discretion on hundreds of occasions when placing trades in the accounts of customers, without prior written authorization from the customers or written approval from his firm. The complaint further alleges that Kazmi repeatedly made false statements to the firm and to FINRA about using instant messaging to conduct securities business. Kazmi denied using instant messaging to communicate with customers in compliance questionnaires that he signed and submitted to the firm, and he falsely stated to FINRA and to the firm that his use of instant messaging was limited to a single client. Kazmi also falsely denied exercising discretion in customer accounts in statements to both the firm and FINRA. In addition, the complaint alleges that Kazmi also placed purchase orders for shares in initial public offerings on behalf of a customer whom Kazmi knew to be a registered representative of another broker-dealer. Kazmi received a total of $10,350.71 in commissions on these purchases and the subsequent sale transactions by this representative who was also his firm’s customer.”

Kazmi has been the subject of three customer complaints between 1999 and 2020, according to his CRD report. The most recent complaints are regarding: 

July 2020. “The clients allege the investments they purchased between 2013-2014 were unsuitable and misrepresented to them by the representative. The clients also allege the firm failed to supervise the actions of the representative and failed to conduct adequate due diligence.” The customer is seeking $350,000 in damages and the case is currently pending. The complaint was regarding real estate securities and business development companies (BDCs).

July 2020. “The client alleges the investments he purchased between 2013-2014 were unsuitable and misrepresented by the representative. The client also alleges the firm failed to supervise the actions of the representative and failed to conduct adequate due diligence.” The customer is seeking $165,000 in damages and the case is currently pending. The complaint was regarding real estate securities, BDCs, and common and preferred stocks. 

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, Berthel, Fisher & Company Financial Services, Inc. may be liable for investment or other losses suffered by Kazmi’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.