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Investors with Prospera Financial Services: Did You Lose Money?

Securities Lawyer Jonathan Kurta
By: Jonathan Kurta Author
April 21, 2023 at 9:43pm

Prospera Financial Services (CRD #: 10740), a brokerage firm with headquarters in Dallas, Texas, describes itself as a boutique broker-dealer. Investors should be aware that this firm has ten regulatory actions on its record. Keep reading to learn which regulatory rules this firm violated, the firm’s conflicts of interest, and brokerage fees that could affect your investment portfolio.

Prospera Financial does business under 147 different names. These names include:

  • Accredited Fiduciary Advisors
  • Twin River Wealth Management
  • TVC Wealth
  • TN Wealth Management
  • The Ragusa Group
  • The Financial Maestro
  • Summit Investments
  • Stonebridge Wealth Managements

You can see the full list of d.b.a. names on the firm’s BrokerCheck record.

Can I Sue Prospera Financial Services?

Yes, you can recover losses following broker fraud or misconduct. However, the process may be different from suing in a civil court. Many investment contracts require investors to sign a pre-dispute arbitration clause. This means that investors must agree to use FINRA arbitration to resolve any disputes. Securities attorneys can explain the FINRA arbitration process and can guide you through the process.

Securities Lawyer Jonathan Kurta
Written by: Jonathan Kurta

Jonathan Kurta is an accomplished securities attorney and a founding partner at Kurta Law.

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Conflicts of Interest

Prospera’s Customer Relationship Summary Form (Form CRS) discloses the following conflicts of interest. These will give you an idea of what questions to ask when your Prospera broker recommends certain trades. The form recommends that investors ask, “How might your conflicts of interest affect me, and how will you address them?”

  • The brokerage firm may buy investments from you or sell them to you, and these transactions come with a profit for the firm.
  • Prospera has an incentive to recommend that you trade more often, since each trade comes with a commission for the firm.
  • Prospera has a conflict when the firm recommends you hold cash in your account, because the firm shares in the cash interest revenue from those funds.
  • The firm has an incentive to recommend that you invest with certain third parties with which the firm has a solicitor agreement, which comes with third-party advisory fees for Prospera.
  • Prospera has a conflict of interest when they recommend proprietary products that feature additional fees for the brokerage firm.

 

Brokerage Firm Fees

According to the Form CRS, Prospera’s fees vary and their commissions are negotiable. The amount depends on how you buy or sell, what type of investment you buy or sell, and what kind of account you have with the firm.

  • Transactions in brokerage accounts come with transaction-based fees. This may also be referred to as a “commission.”
  • Bonds, certificates of deposit, and structured products come with profits included in the total security cost. These might be called “markups” or “markdowns.”
  • Mutual funds come with fees called “loads.”
  • Mutual funds and variable annuities feature their own internal fees that could take away from your returns.
  • Other products with their own internal investment product fees include mutual funds, Unit Investment Trusts (UITs), exchange-traded funds (ETFs) non-traded and direct participation investments, managed futures funds, variable life insurance products, and 529 accounts.

Regulatory Actions

Investors should review the most recent regulatory actions on Prospera’s record. You can review the complete list of disclosures in the BrokerCheck record.

Cease-and-Desist Order Regarding Exchange-Traded Funds

On August 25, 2016, the SEC issued a cease-and-desist order alleging that Prospera negligently relied on misrepresentations made by a third party. This company marketed an investment strategy that evaluated whether to buy or sell exchange-traded funds. Prospera allegedly took insufficient steps to confirm the accuracy of the company’s historical data and other information. Instead, they relied on inflated performance data.  

The SEC fined Prospera $100,00 as part of the Order.

Alleged Failure to Create a Reasonable Supervisory System

According to an Acceptance, Waiver, and Consent agreement dated June 3, 2015, Prospera consented to the findings that the firm failed to transmit 32,636 reportable order events to the order audit trail system. The AWC further alleged that the firm did not provide supervision reasonably designed to achieve compliance with applicable securities laws.

As part of the terms of the AWC, the firm consented to a fine of $12,500. The firm also agreed to an undertaking to revise its written supervisory procedures.

Alleged Reporting Failures

On October 25, 2007, the SEC alleged that Prospera, acting through an employee, issued research reports that failed to comply with an SEC regulation. The reports allegedly failed to disclose the meaning of each rating used by the firm in its rating system and failed to provide clear and comprehensive disclosures, among other alleged failures.

Prospera consented to a fine of $30,000.

Prospera Brokers 

The following current or former Prospera brokers have registered with the firm at some point. If you lost money with any of the following brokers, consider reaching out for a free consultation with a securities attorney.

  • Thomas Caruso: https://www.kurtalawfirm.com/blog/thomas-caruso/
  • Jeffrey Poosch: https://www.kurtalawfirm.com/blog/jeffrey-poosch/
  • Mark Forktus: https://www.kurtalawfirm.com/blog/mark-forktus/
  • Andrew Pravlik: https://www.kurtalawfirm.com/blog/andrew-pravlik/
  • Ryan Hyslop: https://www.kurtalawfirm.com/blog/ryan-hyslop/
  • John Rossi: https://www.kurtalawfirm.com/blog/john-rossi/

 

What Should I Do if I Lost Money?

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