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Investors Allege Heath Goldstein Violated Securities Regulations

Heath Goldstein (CRD #: 2147679), a broker formerly registered with Western International Securities, allegedly violated several securities regulations, according to his BrokerCheck record, accessed on July 6, 2023. Investors may have also engaged his services through 1st Financial Investment. If you have questions about Heath Goldstein’s conduct as a broker, read on.

Pending Investor Disputes

On April 17, 2023, an investor filed a dispute alleging that Heath Goldstein breached his contract and engaged in negligent misrepresentation. The client further alleged failure to supervise and other negligence, including negligent violation of Regulation Best Interest. They seek $50,000 in damages.

On March 6, 2023, an investor alleged that Heath Goldstein violated federal and state securities laws, federal and state common law, and FINRA Rules with regard to an investment in GWG L Bonds that resulted in losses for the client.

The investor further alleged negligence, failure to supervise, and the misrepresentation and omission of material facts. They seek $400,000.

On November 15, 2022, an investor named Heath Goldstein in allegations of common law fraud, negligence, failure to supervise, and breach of contract. The client further alleged that he violated the following laws:

  • Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
  • Pennsylvania Unfair Trade Practices and Consumer Protection Law
  • Pennsylvania Securities Act of 1972

The client seeks $288,280 in damages.

FINRA Rule 2010

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

FINRA Rule 2020

FINRA Rule 2020 prohibits the use of deception, manipulation, and other fraudulent means of influencing investors’ decisions. This includes the misrepresentation or omission of information, such as an investment’s potential returns, risks, or limitations.

FINRA Rule 3110

Failure to supervise violates FINRA Rule 3110, which requires firms to establish supervisory systems to ensure their compliance with securities law.

FINRA Rule 2111 and Regulation Best Interest

FINRA Rule 2111 requires brokers to recommend securities that adequately suit an investor’s financial goals. Brokers must use the information described in an investor’s profile, such as their age, tax status, and financial goals when making recommendations.

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.

Securities Exchange Act of 1934

Section 10(b) of the Securities Exchange Act of 1934 prohibits the use of deceptive, and otherwise fraudulent practices relating to the purchase and sale of securities. Within this section, Rule 10b-5 prohibits fraudulent schemes, as well as untrue statements and misleading omissions of fact.

Section 20(a) makes liable every person controlling a person accused of violations. In other words, supervisors responsible for detecting and preventing violations of securities laws can be considered responsible for the violations of the brokers they supervise.

What are Blue Sky Laws?

Blue sky laws are state regulations designed to complement federal securities laws. These regulations prohibit brokers from engaging in deceptive and fraudulent behavior and may also define what qualifies as a security in a particular state.

What qualifies as broker negligence?

Many forms of misconduct may qualify as broker negligence, including unsuitable investment recommendations, misrepresentations, and failure to supervise. Investors may be able to recover funds lost through broker negligence by seeking out FINRA arbitration.

Settled and Denied Disputes

On January 5, 2023, an investor filed a dispute alleging that Heath Goldstein made false and misleading statements with regard to a bond investment. The client also alleged misconduct relating to the suitability rule.

They sought $172,800 in damages but the firm denied the dispute. However, investors should know that firms can deny disputes without an external review. Investors may be able to recover their losses after a denial through FINRA arbitration.

On February 16, 2018, Heath Goldstein allegedly sold unsuitable alternative investments in gas drilling partnerships. The dispute was settled for $51,000.

Background Information

Heath Goldstein has passed the following exams:

  • Series 66 – Uniform Combined State Law Examination
  • Series 63 – Uniform Securities Agent State Law Examination
  • Series 99TO – Operations Professional Examination
  • SIE – Securities Industry Essentials Examination
  • Series 7 – General Securities Representative Examination
  • Series 11 – Assistant Representative-Order Processing Qualification Exam
  • Series 24 – General Securities Principal Examination

Heath Goldstein is a registered broker in six states. He is also a registered investment adviser in Colorado, Louisiana, Minnesota, Pennsylvania, and Texas.

He previously worked for the following firms:

  • Calton & Associates (CRD#:20999)
  • Kalos Capital (CRD#:44337)
  • WFG Investments (CRD#:22704)
  • Berthel, Fisher & Company Financial Services (CRD#:13609)
  • Midsouth Capital (CRD#:35039)
  • PFS Investments (CRD#:10111)
  • Merrill Lynch, Pierce, Fenner & Smith (CRD#:7691)
  • Prudential Securities (CRD#:7471)

Kurta Law Can Help

If you worked with Heath Goldstein and you have concerns about your investments, please contact us today at 877-600-0098 or 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.