The law firm of KlaymanToskes is representing a New Jersey couple in a FINRA arbitration claim (Case No. 22-02410) against Nabil “Bilo” Bouab and American Portfolios Financial Services seeking $776,000. The claim alleges that Bouab and American Portfolios violated various securities laws by providing unsuitable investment advice, churning, and mismanaging discretionary accounts among other things.
Misconduct in Discretionary Accounts
According to the claim, the investors placed their confidence and trust in Bouab and American Portfolios, giving them discretionary authority to make financial decisions in their accounts. Instead of following the investment objectives of income with moderate risk, Bouab and American Portfolios actively mismanaged the investors’ accounts causing them substantial damages.
The mismanagement included concentrating the investors accounts in both the emerging markets sector and speculative equities. Additionally, Bouab actively and aggressively traded the investors accounts. This conduct is also known as churning.
Speculative Equities, Including SPACs
Specifically, Bouab and American Portfolios began shifting the investors accounts from diversified mutual funds and ETFs into speculative, equity investments including Special Purpose Acquisition Companies (“SPACs”).
SPACs are considered high-risk investments and did not match the investors’ moderate risk tolerance. The SPACs purchased in the investors’ accounts performed poorly, significantly declining from their highs as indicated below.
The Investors Were in The Dark
Throughout their relationship with American Portfolios, the investors rarely heard from Bouab. While American Portfolios and Bouab did not have quarterly and annual account reviews with the investors, Bouab recorded that he had annual telephonic account reviews with the investors. This was false.
When the investors noticed a significant decline in their account value, they were surprised to find they were holding mostly equities, including SPACs. At the time, the investors had never heard of “SPACs”.
Bouab never advised the investors of the change in allocation to speculative investments. If he had explained the plan, securities and their risks, the investors could have made decisions better suited to their investment goals.
FINRA requires financial advisors to disclosure all material information about securities to their customers. If your advisor purchased securities in your account without explaining the facts, costs, or risks, they have breached FINRA’s rules. KlaymanToskes can help you determine if your losses are a result of your broker’s misrepresentation and/or omission of facts.
Bouab’s History of Misconduct
Nabil “Bilo” Bouab has a history of misconduct. Since 2013, Bouab has been a registered representative with American Portfolios Financial Services, Inc. in their Ho-Ho-Kus, NJ office. However, Bouab was previously employed at Royal Alliance Associates, Inc., where he was permitted to resign after alleged misconduct. In July 2015, Bouab was suspended by FINRA for 20 business days and signed an Acceptance, Waiver and Consent that alleged conduct whereby he impersonated a client to effectuate trades in their account.
Warning Signs for Investors
Investors need to be aware of the warning signs of broker misconduct and investment fraud. If you have experienced any of the following, contact the law firm of KlaymanToskes for a free consultation.
Recover Your Losses – Contact KlaymanToskes for a Free Consulation
If an investor has suffered losses as a result of broker misconduct, they can hold their brokerage firm and/or financial advisor responsible in a FINRA arbitration claim. Our attorneys have the experience to identify securities violations and prosecute on your behalf.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered more than $250 million for investors in FINRA arbitrations and over $350 million in other securities litigation matters for its clients. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.