Ray Lent Named in Allegations of Misrepresentation and Overconcentration

Ray Lent (CRD #: 817645), a broker registered with Portsmouth Financial Services, is the subject of four pending investor disputes, according to his BrokerCheck record, accessed on April 14, 2023. If you want to know more about his alleged conduct as a broker, read on.

Investor Disputes

Four disputes filed in February and March 2023 collectively allege that Ray Lent and Portsmouth Financial engaged in the following forms of misconduct:

• Failure to conduct due diligence
• Misrepresentation and omission of information
• Overconcentration
• Unsuitable recommendations

These disputes are currently pending.

FINRA Rule 2111 and Regulation Best Interest

FINRA Rule 2111 requires brokers to take investors’ profiles into account when recommending investments. These profiles describe an investor’s age, risk tolerance, and financial goals.

Regulation Best Interest (Reg-BI) is an SEC regulation that requires brokerage firms to put their clients’ best interests first. For example, firms must conduct reasonable due diligence when researching investments to ensure their recommendations are suitable for the investor.

FINRA Rule 2020

FINRA Rule 2020 prohibits the use of manipulative, deceptive, or otherwise fraudulent methods to influence investors’ decisions. This includes the misrepresentation or omission of information related to investments.

SEC Censure

On March 11, 2019, the Securities and Exchange Commission executed cease-and-desist proceedings against Ray Lent (d/b/a The Putney Financial Group) for allegedly breaching his fiduciary duty as an investment adviser and providing inadequate disclosures to clients with regard to The Putney Financial Group’s mutual fund share class selection practices and 12b-1 fees.

According to the SEC, between January 1, 2014, and June 7, 2018, Ray Lent allegedly purchased, recommended, or held mutual fund share classes for advisory clients that charged 12b-1 fees despite these clients being eligible for lower-cost share classes of the same funds.

The Putney Financial Group allegedly failed to disclose in its Form ADV its conflicts of interest related to its receipt of 12b-1 fees and/or its selection of mutual fund share classes that paid the firm these fees.

Ray Lent allegedly self-reported these violations to the SEC as part of the Share Class Selection Disclosure Initiative, wherein the SEC encouraged investment advisors to report their violations of Rule 12b-1 of the Investment Company Act of 1940 for a favorable settlement.

The SEC alleged that Ray Lent willfully violated Sections 206(2) and 207 of the Investment Advisers Act of 1940.

Investment Advisers Act of 1940

Section 206(2) of the Investment Advisers Act of 1940 prohibits the use of fraudulent and deceptive business practices.

Section 207 prohibits investment advisers and firms from making untrue statements or willful omissions in registration applications or reports filed with the SEC.

Sanctions

Ray Lent consented to the following sanctions:

• Censure
• Disgorgement of $39,546.51
• Other monetary penalty of $3,488.32
• Unspecified undertakings

He and The Putney Financial Group were also ordered to cease and desist from violations of Sections 206(2) and 207 of the Investment Advisers Act of 1940.

Background Information

Ray Lent 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 1 – Registered Representative Examination
• Series 24 – General Securities Principal Examination

Ray Lent is a registered broker in 17 states.

He has also worked for the following firms:

• McClurg Capital Corporation (CRD#:16798)
• Park Avenue Securities (CRD#:46173)
• Guardian Investor Services (CRD#:6635)
• Centaurus Financial (CRD#:30833)
• Mony Securities Corporation (CRD#:4386)
• The Mutual Life Insurance Company of New York (CRD#:2873)

Kurta Law Can Help

If you worked with Ray Lent 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.