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Investor Seeks Half a Million in Damages in Dispute with Lorraine Gallette

Jan 18, 2023 Unsuitable Investments

Lorraine Gallette (CRD #: 6192487), a broker formerly registered with Moloney Securities Company, allegedly made unsuitable investment recommendations, according to her BrokerCheck record, accessed on January 10, 2023. If you want to know more about her alleged conduct as a broker, keep reading.

Investor Disputes

On October 13, 2022, an investor alleged that Lorraine Gallette recommended unsuitable investments. The client seeks $500,000 in this pending dispute.

In two disputes filed in 2020, multiple investors alleged that Coastal Equities failed to conduct sufficient due diligence on certain unsuitable investments recommended by Lorraine Gallette during a collective time frame spanning 2013-2020. These clients received settlements totaling $295,000.

FINRA Rule 2111

FINRA Rule 2111 defines suitable investments as securities that fit an investor’s profile. Brokers must take into account an investor’s tax status, age, risk tolerance, and other information described in their profile.

  • Investments can be unsuitable because they are high-risk and more likely to cause losses for the client.
  • Investments may also be unsuitable because they are illiquid. Certain securities are meant to be held for an extended time and can penalize investors with high fees if they try to cash out too soon.
  • Trading activity can be quantitatively unsuitable, which means that the broker executed an excessive number of trades.
  • Overall investment strategies can also be unsuitable—overconcentration in a singular stock or sector is a common example.

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

Background Information

Lorraine Gallette has passed the following exams:

  • Series 63 – Uniform Securities Agent State Law Examination
  • SIE – Securities Industry Essentials Examination
  • Series 7 – General Securities Representative Examination

She previously worked for Moloney Securities Company (CRD#:38535) and Coastal Equities (CRD#:23769).

Kurta Law Can Help

If you worked with Lorraine Gallette and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com 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.