American Portfolios Financial Services

Kurta Law is investigating recommendations by brokers from American Portfolios Financial Services (CRD #: 18487). American Portfolios Financial Services is an independent broker-dealer with its main address in Holbrook, NY. It has operated under the names Triad Financial Group and Triad Financial Inc.

Conflicts of Interest and Fees

American Portfolios Financial Services brokers have conflicts of interest based on how they make money. Investors should note that fees can vary and are negotiable.

• Brokers receive a portion of the commissions charged for investments. They may also earn a portion of the markups and markdowns associated with bonds, or the “sales loads” that come with mutual funds. These fees create an incentive for brokers to recommend certain investment products over others.
• Investors may pay additional fees, such as custodian fees, account maintenance fees, or inactivity fees.
• Margin accounts come with their own fees, as do variable annuities, bank sweep accounts, Exchange-Traded Fees, 529s, and UITs.
• Advisory fees are separate from brokerage fees. Make sure you understand your financial representative’s official designation and how their role with American Portfolios affects their commissions and/or fees.

Regulatory Actions

You can see all eight disclosures on the firm’s detailed BrokerCheck record.

$225,000 FINRA Fine Following Allegations the Firm Failed to Detect Suspicious Trading Activity

On August 15, 2024, American Portfolios Financial Services entered into an Acceptance, Waiver, and Consent agreement to settle with FINRA following allegations that the firm failed to catch the red flags of suspicious trading activity in low-priced securities.

Under the Bank Secrecy Act of 1970, brokerage firms are required to have procedures in place to flag suspicious transactions. Firms are required to report those suspect transactions to the Financial Crimes Enforcement Network.

According to the AWC, American Portfolios Financial Services failed to investigate hundreds of suspicious transactions in low-priced securities in at least ten accounts held by four customers. Each customer allegedly engaged in a suspicious pattern of depositing shares of low-priced securities, liquidating some or all of those shares, and withdrawing the funds shortly thereafter. Many of the liquidations occurred during spikes in price during promotional campaigns.

As part of the terms of the AWC, American Portfolios Financial Services consented to a fine of $225,000. You can read a copy of the AWC here.

$225,000 FINRA Fine Following Allegations of Unauthorized Transmittals

There is another Acceptance, Waiver, and Consent agreement (AWC) dated December 10, 2021, alleging that American Portfolios Financial Services did not adequately monitor the transmittals of customer funds to third parties and failed to enforce its own supervisory procedures related to transmittals of customer funds. As a result, a sales assistant who was associated with the firm was allegedly able to misappropriate $390,000 of customer funds. Most of the allegedly affected customers were senior citizens.

The firm also allegedly failed to enforce procedures and did not require or maintain any records of signature verification, including verification of signatures on authorization documents.

As part of the terms of the AWC, American Portfolios Financial Services consented to a fine of $225,000. You can read the terms of the AWC here.

$650,000 SEC Fine Regarding Exchange-Traded Products

On November 13, 2020, the Securities and Exchange Commission alleged that American Portfolios Financial Services failed to reasonably supervise certain representatives who recommended that brokerage customers buy and hold complex Exchange-Traded Products (ETPs) without a reasonable basis for making such recommendations. These products included IPath S&P 500 VIX Short-Term Futures ETN (VXX). Investors in these ETPs allegedly suffered significant losses and the brokers who recommended them allegedly did not understand how they were supposed to work.

The SEC imposed a fine of $650,000.

$50,000 FINRA Fine Following Allegations of Unsuitable Mutual Fund Switching

On December 31, 2015, American Portfolio Financial Services consented to the findings that it engaged in unsuitable mutual fund switching. Mutual fund switches can impose unnecessary costs for the investor, so these switches must be in the investor’s best interest. As a result of the unsuitable switching, investors allegedly paid $91,000 in unnecessary sales charges.

These allegations appear in an Acceptance, Waiver, and Consent agreement in which the firm consented to a $50,000 fine You can read a copy of the AWC here.

Alleged Misconduct by Brokers

American Portfolios Financial Services works with brokers who have investor disputes on their BrokerCheck records. Kurta Law is aware of the following current or former American Portfolios Financial Services brokers with misconduct records, but this is not necessarily a complete list. Contact a securities attorney if you have concerns about your broker’s conduct.

• Michael Kirwan: https://www.kurtalawfirm.com/blog/michael-kirwan/
• Jason Mieras: https://www.kurtalawfirm.com/blog/jason-mieras/
• Brody Bray: https://www.kurtalawfirm.com/blog/brody-bray/
• Thomas Demergian: https://www.kurtalawfirm.com/blog/thomas-demergian/
• Louise Fallica: https://www.kurtalawfirm.com/blog/louise-fallica/
• Bernard Bostwick: https://www.kurtalawfirm.com/blog/bernard-bostwick/

Kurta Law Can Help

Investors who lost money working with an American Portfolios Financial Services broker should reach out to an investment fraud lawyer for help. Our attorneys offer free case evaluations and do not charge a fee unless we win your case. Call (877) 600-0098 or email info@kurtalawfirm.com.