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Paul Newton Allegedly Recommended Unsuitable Sale of Annuity

Dec 22, 2022 Unsuitable Investments

Paul Newton (CRD #: 2196433), a broker registered with Centaurus Financial, allegedly gave an unsuitable recommendation, according to his BrokerCheck record, accessed on December 13, 2022. Read on if you want to know more about his alleged conduct as a broker.

Investor Dispute

On September 13, 2022, an investor alleged Paul Newton made an unsuitable recommendation to sell a variable annuity in March 2021. The client alleged that following this recommendation triggered a tax liability. The investor seeks $60,000 in damages in this pending dispute.

Variable annuities are complex investments that often do not suit investor’s needs.

FINRA Rule 2111

FINRA Rule 2111 requires brokers to recommend securities that adequately suit an investor’s financial goals. Brokers must consider the information in an investor’s profile, such as their risk tolerance, age, and tax status when making recommendations.

  • High-risk investments may be unsuitable due to their likelihood of losing money.
  • Illiquid investments can be difficult to sell in the short-term and tend to incur high fees when investors attempt to sell them too soon.
  • Excessive trading violates the need for quantitative suitability. This means that the overall number of trades executed must also be suitable for the client’s financial goals.
  • Investment strategies are also required to be suitable for the investor. For example, the level of risk involved in overconcentration of securities in a certain sector or stock may be unsuitable for some investors.

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

Background Information

Paul Newton has passed the following exams:

  • 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

Paul Newton is a registered broker in Florida, Maryland, and the District of Columbia. He is also a registered investment adviser in Maryland and the District of Columbia.

He has also worked for the following firms:

  • Securities America Advisors (CRD#:110518)
  • Securities America (CRD#:10205
  • Centaurus Financial (CRD#:30833)
  • Allstate Financial Services (CRD#:18272)
  • USAllianz Securities (CRD#:40875)
  • MML Investors Services (CRD#:10409)
  • Mason Securities (CRD#:12967)

Kurta Law Can Help

If you worked with Paul Newton 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.