Investor Seeks $1 Million in Dispute with German Ramirez DeArellano Alleging Fraud

German Ramirez DeArellano (CRD #: 1244421), a broker registered with First Southern, is involved in a pending dispute, according to his BrokerCheck record, accessed on May 3, 2023. Investors may have also engaged his services through First Southern Asset Management. Read on to learn more about his alleged conduct as a broker.

Pending Dispute

On February 22, 2023, an investor filed a dispute naming German Ramirez DeArellano in allegations of the following:

• Fraud (including constructive fraud)
• Violation of federal securities laws, including Regulation Best Interest
• Violation of the Puerto Rico Uniform Securities Act and Civil Code
• Violation of FINRA Rules
• Misrepresentations and omissions
• Failure to supervise
• Negligence
• Breach of contract

The client seeks $1 million in damages in this pending dispute.

Regulation Best Interest

Regulation Best Interest (Reg-BI) is an SEC regulation that requires brokerage firms to put their clients’ best interests first. For example, firms must conduct reasonable due diligence when researching investments to ensure their recommendations are suitable for the investor.

FINRA Rule 2020

FINRA Rule 2020 forbids the use of fraudulent tactics, like deception or manipulation, as they relate to the purchase and sale of securities.

FINRA Rule 3260

FINRA Rule 3260 forbids brokers from conducting discretionary trading outside of accounts approved in advance by their client and firm.

FINRA Rule 2010

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.

What are Blue Sky Laws?

Blue sky laws are state securities regulations that provide investors with an extra layer of protection against fraud. They often also define what investments must register with the state securities board.

What is broker negligence?

Brokers may act in many negligent ways. Common examples include misrepresentations or omissions of fact, failure to supervise, and unsuitable investment recommendations.

Investors who feel their losses are the result of broker negligence may be able to recover their funds by pursuing FINRA arbitration.

Settled Disputes

On January 31, 2017, an investor named German Ramirez DeArellano in allegations of the following forms of misconduct with regard to Puerto Rico closed-end funds:

• Fraud (including constructive fraud)
• Violations of securities laws
• Overconcentration and other suitability violations
• Failure to supervise
• Negligence
• Breach of contract

The client sought $1.2 million in damages and received a settlement of $218,750.

Four disputes filed in 2015 alleged that German Ramirez DeArellano misrepresented and/or overconcentrated clients in certain investments, namely Puerto Rico closed-end funds and municipal bonds. Investors alleged that this misconduct occurred during a collective time frame spanning 2009 to 2015. These disputes were settled for a total of $6.37 million.

FINRA Rule 2111

FINRA Rule 2111 defines suitable investments as securities that fit an investor’s profile. These profiles include information about their risk tolerance, financial goals, and age.

Investors who rely on brokers for recommendations may be able to recover their losses through FINRA arbitration.

Tax Lien

On May 4, 2022, German Ramirez DeArellano incurred a $39,807.85 tax lien.

Background Information

German Ramirez DeArellano has passed the following exams:

• Series 65 – Uniform Investment Adviser Law Examination
• Series 63 – Uniform Securities Agent State Law Examination
• Series 52TO – Municipal Securities Representative Examination
• SIE – Securities Industry Essentials Examination
• Series 3 – National Commodity Futures Examination
• Series 7 – General Securities Representative Examination
• Series 53 – Municipal Securities Principal Examination
• Series 24 – General Securities Principal Examination

German Ramirez DeArellano is a registered broker in six states and Puerto Rico. He is also a registered investment adviser in Puerto Rico.

He has also worked for the following firms:

• Herbert J. Sims Capital Management (CRD#:134510)
• Herbert J. Sims & Company (CRD#:3420)
• UBS Financial Services Incorporated of Puerto Rico (CRD#:13042)
• UBS Financial Services (CRD#:8174)
• Santander Securities (CRD#:41791)
• PaineWebber Incorporated of Puerto Rico (CRD#:13042)
• PaineWebber (CRD#:8174)     
• Shearson Lehman Hutton (CRD#:7506)
• E. F. Hutton & Company (CRD#:235)
• Drexel Burnham Lambert (CRD#:7323)
• Becker Paribas (CRD#:7635)

Kurta Law Can Help

If you worked with German Ramirez DeArellano and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want 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.