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Jon Rustad Involved in Six-Figure Dispute Alleging Unsuitability

Dec 10, 2021 Investor Disputes

Jon Rustad (CRD #:2210391), a broker and investment advisor registered with Centaurus Financial, is involved in an investor dispute, according to his BrokerCheck record, accessed on November 17, 2021. 

Investor Allegations 

On September 1, 2021, an investor filed a dispute alleging that Jon Rustad recommended multiple unsuitable investments. The dispute is still pending. The damage amount requested is $325,000. 

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, and 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: The number of trades, as well as the type of trades, must suit the investor’s needs. 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. 

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

Jon Rustad Background Information 

Jon Rustad has passed the following exams: 

  • Series 65 - Uniform Investment Adviser Law Examination 
  • Series 63 - Uniform Securities Agent State Law Examination 
  • SIE - Securities Industry Essentials Examination 
  • Series 7 - General Securities Representative Examination 
  • Series 6 - Investment Company Products/Variable Contracts Representative Examination 

Jon Rustad is a registered broker in six states. He is a registered investment adviser in Arizona. 

Besides Centaurus Financial, Jon Rustad has worked with the following firms: 

  • NPB Financial Group (CRD#:137743) 
  • Independent Financial Group (CRD#:7717) 
  • SII Investments (CRD#:2225) 
  • Sunset Financial Services (CRD#:3538) 
  • Carillon Investments (CRD#:14646) 
  • Mony Securities Corporation (CRD#:4386) 
  • The Prudential Insurance Company of America (CRD#:680) 
  • Pruco Securities Corporation (CRD#:5685) 

Kurta Law Can Help 

If you have suffered losses after working with Jon Rustad, 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.