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Investor Claims John Gibson Recommend Unsuitable Investments

Dec 10, 2021 Investor Disputes

John Gibson (CRD #:5925373), a broker formerly registered with Hightower Securities, is involved in an investor dispute, according to his BrokerCheck record, accessed on November 17, 2021. Keep reading for more details regarding the allegations. 

Investor Allegations 

On August 18, 2021, an investor filed a dispute alleging that John Gibson recommended an unsuitable private placement investment. Private placements are unsuitable because they do not trade on a public exchange. The dispute is still pending. The damage amount requested is $100,001. 

What is a Suitable Investment? 

FINRA defines suitable investments as securities that fit an investor's profile. An investor's profile includes information about their risk tolerance, financial goals, investing experience, and age. It's important that the investment recommendations of a financial advisor match the investor’s profile. 

FINRA Rule 2111 identifies the three prongs of a suitability determination as 1) reasonable-basis suitability; 2) customer-specific suitability; 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 the nature of your investment strategy and its potential risks or rewards in order to find out if it will work with at least some investors. 
  1. Customer-specific Suitability: Before making a recommendation of the 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. 
  1. 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 trading is also called “churning” and it makes it impossible for the investor to generate a return.  

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

John Gibson Background Information 

John Gibson has passed the following exams: 

  • Series 66 - Uniform Combined State Law Examination 
  • SIE - Securities Industry Essentials Examination 
  • Series 7 - General Securities Representative Examination 

John Gibson has worked with the following firms: 

  • Hightower Securities (CRD#:116681) 
  • Morgan Stanley (CRD#:149777) 

 
Kurta Law Can Help 

If you have suffered losses after working with John Gibson, don't hesitate to contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation. 

For nearly 20 years, Kurta Law has advocated for investors. 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. Reach out today to start the process to recover your investment losses.