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Paul Murphy Involved in Two Pending Investor Disputes 

Mar 16, 2022 Unsuitable Investments

Paul Murphy (CRD #: 5132291), a broker and investment advisor registered with Calton & Associates, is facing two pending unsuitability disputes, according to his BrokerCheck record, accessed on March 2, 2022. 

Investor Allegations

In 2021, Paul Murphy was involved in two pending investor disputes, both alleging a breach of fiduciary duty and unsuitable investment recommendations. The investors are seeking $132,122.44 and $457,173.69 respectively. 

Recommending Unsuitable Investments is a Breach of Fiduciary Duty

A financial advisor who recommends a security or investment is subject to ethical standards enforced by FINRA. One such standard is known as the suitability rule, a.k.a. FINRA Rule 2111. 

FINRA Rule 2111 requires registered financial advisors to have a “reasonable basis” to believe that a recommended transaction or investment strategy suits their client’s needs.

FINRA has three requirements for suitable investments: 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. They have an obligation to understand an investment strategy and its potential risks or rewards.
  2. Customer-specific Suitability: Before recommending a particular security or investment strategy, 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. 
  3. 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. 

If you’ve lost money due to a financial advisor’s bad recommendations, do not hesitate to contact an experienced securities attorney as soon as possible. Kurta Law is a nationally recognized securities law firm with over 25 years of experience litigating securities fraud cases.

A violation of FINRA Rule 2111 is also a violation of FINRA Rule 2010, which requires member firms and their associated persons to “observe high standards of commercial honor and just and equitable principles of trade.”

Background Information

Paul Murphy 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
  • Series 24 – General Securities Principal Examination

Paul Murphy is a registered broker in 34 states and Washington D.C. He is also a registered investment advisor in Florida.

Besides Calton & Associates, Paul Murphy has also worked with the following firms:

  • Newport Coast Asset Management (CRD#:16944)
  • Newport Coast Securities (CRD#:16944)
  • J P Turner & Company Capital Management (CRD#:124446)
  • J.P. Turner & Company (CRD#:43177)
  • Brookstreet Securities Corporation (CRD#:14667)

Kurta Law Can Help

If you have worked with Paul Murphy and have concerns about your investments, don’t hesitate to contact us today at 877-600-0098 or 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 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.