John Townshend Suspended in Arkansas Following Allegations of Elder Abuse
John Townshend (CRD # 2784752), a previously registered broker and current investment adviser, was barred by the Arkansas Securities Department, according to his BrokerCheck profile. Details are provided below.
On February 15, 2022, the Arkansas Securities Department barred John Townshend following allegations that he recommended unsuitable investments. The consent order alleged that John Townshend sold $650,000 in annuities owned by two elderly Arkansans. The investors were in their mid-80s and were in poor health. John Townshend allegedly bought an illiquid, unregistered private fund and allegedly failed to disclose that the fund was owned, created, and managed by John Townshend.
John Townshend is barred from February 15, 2022, until August 15, 2022.
Unsuitable Investments
FINRA Rule 2111 identifies three prongs of a suitability determination: 1) reasonable-basis suitability, 2) customer-specific suitability, and 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 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.
- 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.
Background Information
John Townshend passed the following exams:
- Series 65 – Uniform Investment Adviser Law Examination
- Series 63 – Uniform Securities Agent State Law Examination
- Series 7 – General Securities Representative Examination
- Series 6 – Investment Company Products/Variable Contracts Representative Examination
He has worked for the following firms:
- Hornor, Townsend & Kent, Inc. (CRD # 4031)
- 1st Global Capital Corp. (CRD # 30349)
- Mony Securities Corp. (CRD # 4386)
Kurta Law Can Help
If you worked with John Townshend and have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.
For nearly 20 years, Kurta Law has advocated on behalf of investors recovering their investment losses from stockbrokers and brokerage firms. Kurta Law is a nationally recognized law firm that exclusively represents investors. We work on a contingency basis, which means that the firm only earns a fee if our securities attorneys recover money on your behalf. Reach out and we can tell you what steps to take to restore your lost funds.