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Michael Schmidt Allegedly Violated FINRA Rule 2111 with an Unsuitable Recommendation

Aug 14, 2023 Unsuitable Investments

Michael Schmidt (CRD #: 2831658), a broker registered with Merrill Lynch, Pierce, Fenner & Smith, is facing a suitability dispute, according to his BrokerCheck record, accessed on August 11, 2023. Keep reading if you have questions about his alleged conduct as a broker. 

On July 3, 2023, an investor alleged that Michael Schmidt recommended unsuitable investment account strategies from February through June 2023. Unsuitable investments violate FINRA Rule 2111. 

FINRA Rule 2111

FINRA Rule 2111 defines suitable investments as securities that fit an investor’s profile. An investor’s profile includes their age, risk tolerance, financial goals, and tax status.

Some common violations of this rule include:

  • Recommendations of high-risk or illiquid investments. These investments may lead to losses or high fees for the investor.
  • Excessive trading, which violates the need for quantitative suitability. This means that overall trading activity must also suit an investor’s goals.
  • Recommendations of unsuitable investment strategies. For instance, overconcentration of securities in a certain stock or sector is typically unsuitable due to the degree of risk.

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

Background Information 

Michael Schmidt 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 31 Futures Managed Funds Examination 
  • Series 7 General Securities Representative Examination 

He is a registered broker in 32 states and D.C. He is a registered investment adviser in Texas. 

Michael Schmidt has registered with the following firms: 

  • Merrill Lynch Pierce, Fenner & Smith (CRD #: 7691) 
  • Morgan Stanley (CRD #149777)
  • Morgan Stanley & Co. Incorporated (CRD #: 8209)
  • Morgan Stanley (CRD #: 7556) 
  • CIBC Oppenheimer Corp. (CRD #: 630) 

Kurta Law Can Help

If you worked with Michael Schmidt and you have concerns about your investments, please contact us today at 877-600-0098 or 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.