Did John Hemmens Recommend Unsuitable Investments?
John Hemmens (CRD #:4399632), a broker and investment advisor registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated, is involved in an investor dispute, according to his BrokerCheck record, accessed on November 17, 2021.
On September 9, 2021, an investor filed a dispute alleging that John Hemmens recommended multiple unsuitable investments. The dispute is still pending.
The disclosure does not specify the nature of the unsuitable investment, but brokers are required to have a reasonable basis for recommending an investment according to FINRA Rule 2111.
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, and age.
FINRA Rule 2111 identifies the three prongs of a suitability determination as 1) reasonable-basis suitability; 2) customer-specific suitability; 3) quantitative suitability.
- 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.
- Customer-specific Suitability: Before making a recommendation of 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.
- 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.
John Hemmens Background Information
John Hemmens has passed the following exams:
- Series 66 – Uniform Combined State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
John Hemmens is a registered broker in 13 states. He is a registered investment adviser in Texas and New Jersey.
Besides Merrill Lynch, Pierce, Fenner & Smith Incorporated, John Hemmens has not worked with any other firm.
Kurta Law Can Help
If you have worked with John Hemmens and have concerns about your investments, don’t hesitate to contact us today at 877-600-0098 or firstname.lastname@example.org 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 that exclusively represents investors against brokers and brokerage firms on a contingency basis. The firm only earns a fee if our securities attorneys recover money on your behalf.