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David Bahnsen Embroiled in a $5 Million Unsuitability Dispute

David Bahnsen (CRD #:4445322), a broker registered with Hightower Securities, is involved in an unsuitability dispute according to his BrokerCheck record, accessed on February 10, 2022. He is also an investment advisor registered with Hightower Advisors.

On December 20, 2021, David Bahnsen was named in an investor dispute alleging unsuitability with regards to a managed account. The investor is seeking to recover $5,000,000一the dispute is still pending.

What is Suitability?

Suitability” is the term used to describe an ethical, enforceable standard for investments that financial professionals are bound to when dealing with clients. An investment is only considered “suitable” if it meets the suitability criteria outlined in FINRA Rule 2111

According to FINRA, the three prongs of a suitability determination are 1) reasonable-basis suitability, 2) customer-specific suitability, and 3) quantitative suitability.

  1. Reasonable-basis Suitability: Brokers are required to use reasonable diligence before making a recommendation. This means they have an obligation to understand an investment strategy and its potential risks or rewards.
  2. Customer-specific Suitability: Before recommending a particular security or investment strategy involving a specific client, brokers are required to have reasonable grounds for believing it will be suitable based on that client’s personal profile. The profile includes information on the investor’s financial goals, investing experience, and risk tolerance. 
  3. Quantitative Suitability: Brokers with control over a customer’s account must have a reasonable basis to believe that the series of transactions they recommend are not excessive before executing them. Excessive transactions run the risk of incurring too many fees and negating any returns. 

Investors who rely on their brokers for recommendations may be able to recover their losses through FINRA arbitration if their broker recommended an unsuitable investment. 

Background Information

David Bahnsen has passed the following exams:

  • Series 66 – Uniform Combined State Law Examination
  • SIE – Securities Industry Essentials Examination
  • Series 31 – Futures Managed Funds Examination
  • Series 7 – General Securities Representative Examination

He is a registered investment advisor in California.

David Bahnsen has also worked with the following firms:

  • Morgan Stanley (CRD#:149777)
  • Morgan Stanley & Co. Incorporated (CRD#:8209)
  • UBS Financial Services (CRD#:8174)

Kurta Law Can Help

If you have worked with David Bahnsen and have concerns about your investments, don’t hesitate to contact us today at 877-600-0098 or for a free consultation.

For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.