Former Cuso Financial Services Financial Advisor Eric Shanks Accused of Selling Unapproved Investments
Posted on Tuesday, April 23rd, 2019 at 3:53 pm
Erez Law is currently investigating former Cuso Financial Services financial advisor Eric Shanks (CRD# 2724083) regarding selling unapproved investments. Shanks was registered with Cuso Financial Services, LP in Richardson, Texas from 2004 to 2014, when he was terminated regarding, “representative failed to disclose surrender of a fixed annuity to fund a variable annuity purchase.”
According to public records, a former client of Shanks and Cuso Financial Services filed a FINRA arbitration in February 2019 regarding Cuso’s practice of selling away. Selling away is a practice when a financial advisor sells investments away from the brokerage firm in which they are registered. According to the complaint, the former client invested in an unapproved security, Aurora. This investment was allegedly linked to barred former Cuso Financial Services financial advisor Conrad Bautista (CRD# 1582353).
According to Shank’s CRD record, “Arbitration filed which alleges representative solicited client to purchase unapproved investments away from the firm through a third party. Allegations include breach of fiduciary duty and failure to supervise. Representative was discharged by the Firm on 4/28/2014 for unrelated reasons.” The customer is seeking $688,000 in damages and the case is currently pending.
Shanks has been the subject of seven additional customer complaints between 1999 and 2019, two of which were denied, according to his CRD report. Recent cases are regarding:
March 2018. “Client alleges representative, and/or another representative, Conrad Bautista, sold unapproved investments to client away from firm beginning in 2012 and through 2014. Representative was discharged by firm on 4/28/2014 for unrelated reasons.” The customer sought $447,000 in damages and the case was settled for $67,250.
September 2016. “Client alleges that her variable annuity contract was not structured correctly at the time of purchase through a former representative in march 2007. *update to reflect settlement with client completed on 6/2/2017. As an accommodation due to a potential misunderstanding, cfs agreed to compensate client and restore contract and benefit values of client’s va with compensation for loss of principal in the amount of $15,029.46, as well as additional interest compensation in the amount of $8,808.50 and reimbursement of early surrender charges incurred by client in the amount of $894.01 for a total settlement amount of $24,731.97.”
May 2015. “Arbitration filed by claimants seeking compensatory damages for 2 reit investments that clients claim they did not fully understand. Cfs confirmed that all required disclosures and associated risks were provided to the client at the time of sale which were acknowledged in writing. Nevertheless, in the interest of resolving the matter, the parties agreed to settle for the nominal realized loss of ($2,536.19) plus additional interest ($1,961.12).” The customer sought $4,497.31 and the case was settled for that amount.
Bautista was registered with Cuso Financial Services, LP in Richardson, Texas from 2010 to 2013. Bautista has been the subject of one customer complaint, according to his CRD report. Recent cases are regarding:
March 2018. “Client alleges representative, and/or another representative, Eric Shanks, sold unapproved investments to client away from firm beginning in 2012 and through 2014. Representative resigned from firm on 3/18/2013.” The customer sought $447,000 in damages and the case was settled for $67,250.
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, Cuso Financial Services may be liable for investment or other losses suffered by Shanks’ 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.