National investment loss lawyers KlaymanToskes is investigating former Cetera Advisors broker Todd Ray Anderson (CRD# 1896352) following his suspension and fine by the Financial Industry Regulatory Authority (“FINRA”) for misconduct and securities violations. Anderson was suspended for failing to consider his Cetera customer’s qualification for mutual fund “breakpoint” discounts, which cost the customer unnecessary sales charges. .
Anderson’s failure to consider and disclose available cost savings resulted in his customer incurring $20,867 in unnecessary sales charges. The broker allegedly recommended that his elderly customer “purchase $1 million worth of mutual funds across 31 fund families” without considering that the customer would have qualified for volume-based “breakpoint” discounts if he had invested in fewer fund families.
According to FINRA BrokerCheck, Todd Ray Anderson was previously registered with Cetera Advisors until 2019, when he was terminated for failing to follow the firm’s written instruction to obtain pre-approval for all mutual fund purchases. Following his termination from Cetera, the broker became registered with Benchmark Investments and Kingswood Wealth Advisors in Tucson, AZ.
Investors that suffered losses with Todd Ray Anderson and/or any other broker at Cetera Advisors are encouraged to contact attorney Lawrence L. Klayman at (888) 997-9956 or lklayman@klaymantoskes.com for a free consultation. We do not collect attorneys fees unless we are able to obtain a financial recovery for you.
Kingswood Wealth advisor Todd Ray Anderson entered into a regulatory agreement known as a Letter of Acceptance, Waiver, and Consent (“AWC”) with FINRA’s Department of Enforcement on April 20th, 2023.
The Department determined that the broker will remain suspended for 45 days from May 15th to June 28th, 2023. Anderson was also fined $5,000 and ordered to pay restitution to his customer in the amount of $20,867.
The findings state that each of the mutual funds recommended by Anderson to his customer offered volume discounts to sales fees, meaning that the size of the discount increased as the investment reached increasing “breakpoint” ranks set by the fund’s management.
According to the AWC, “Breakpoints could be reached through a single investment in a fund or through ‘rights of accumulation,’ whereby the fund would aggregate new investments with existing holdings within the fund family to calculate the breakpoint discount level”.
In making recommendations to his customer, Anderson failed to consider that if the customer had purchased funds in fewer fund families, they would have received a fee discount by reaching higher breakpoint levels.
Under FINRA Rule 2111 (Suitability), “An associated person’s recommendation to purchase mutual funds may be unsuitable if it fails to consider and disclose available cost savings, including those provided through rights of accumulation and breakpoint discounts”.
Additionally, a violation of FINRA Rule 2111 is also a violation of Rule 2010, which requires that financial professionals and their firms “observe high standards of commercial honor and just and equitable principles of trade”.
Investors that suffered losses as a result of mutual fund sales practice violations at their firm and/or other misconduct at the hands of their broker/advisor are encouraged to contact attorney Lawrence L. Klayman at (888) 997-9956 or lklayman@klaymantoskes.com for a free consultation. We do not collect attorneys fees unless we are able to obtain a financial recovery for you.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration 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.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com