National investment fraud lawyers KlaymanToskes reports Financial Industry Regulatory Authority (“FINRA”) sanctioned Long Island Financial Group, Inc. for violations of the SEC’s Regulation Best Interest and fined the firm $35,000.
If you believe your brokerage firm and/or financial advisor did not act in your best interest when managing your brokerage account, contact KlaymanToskes for a free, confidential consultation at 888-997-9956 or lklayman@klaymantoskes.com.
Long Island Financial Group, Inc. (“LIFG”) entered into an agreement known as a Letter of Acceptance, Waiver, and Consent (“AWC”) with FINRA’s Department of Enforcement on February 10th, 2023. According to the AWC, the Long Island, New York-based firm has been censured and fined $35,000 in connection with findings that it failed to establish, maintain, and enforce written policies and procedures in compliance with the SEC’s Regulation Best Interest (Reg BI).
The firm allegedly failed to “make any reference to Reg BI in its written policies and procedures” from June 30, 2020, to November 1, 2021. In November 2021, LIFG allegedly began using some language and background information related to Reg BI but still had no procedures in place to prevent or detect violations of Reg BI.
Additionally, the AWC states that LIFG allegedly failed to establish and maintain a supervisory system, including written supervisory procedures (WSPs), required to achieve compliance with Reg BI. LIFG violated Exchange Act Rule 15l-1 (Reg BI), FINRA Rule 3110 (Supervision) and FINRA Rule 2010 (Standards of Honor and Principles of Trade).
According to FINRA’s (Financial Industry Regulatory Authority) SEC Regulation Best Interest, the SEC’s “Reg BI”, under the securities exchange act of 1934, establishes a “best interest” standard of conduct for brokers and brokerage firms making recommendations of securities investments and investment strategies to their customers.
FINRA-regulated brokers, financial advisers, and brokerage firms have a responsibility to make recommendations with their customer’s best interest in mind, based upon the client’s personal needs and preferences.
Under the Reg BI rule, the SEC also requires brokers and investment advisors to provide a “brief relationship summary” known as Form CRS, to their customers. This document must be provided to the customer before or at the time they enter into an investment advisory contract with the broker and/or adviser and is used to provide information about investment-related services and fees.
FINRA’s annual examination of Long Island Financial Group in 2021 uncovered that the firm failed to file and deliver its required Form CRS. LIFG’s FINRA BrokerCheck profile now includes a form CRS attachment.
According to FINRA BrokerCheck, Long Island Financial Group’s President, Chief Compliance Officer (“CCO”), and FINOP, is Stuart Reis (CRD# 1774651).
According to Reis’ FINRA BrokerCheck profile, he has previously received a regulatory disclosure for failing to establish, maintain, and enforce written supervisory procedures relating to continuing education and regulatory elements at a previous firm.
When brokers and brokerage firms fail to act in the best interest of their clients, they are violating securities laws. Investors that suffer investment losses as a result of this violation may hold their broker and brokerage firm responsible through FINRA arbitration.
If you believe your financial advisor did not act in your best interest when managing your brokerage account, contact KlaymanToskes for a free, confidential consultation at 888-997-9956 or through our website, www.klaymantoskes.com.
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 over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. 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