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Roy Budd involved in an Unsuitability Dispute 

Jan 19, 2022 Unsuitable Investments

Roy Budd (CRD #:34635), a broker registered with Morgan Stanley, is involved in an unsuitability dispute concerning concentrated investments made in April 2019 in a managed account, according to his BrokerCheck record.  

The dispute, filed on November 8, 2021, does not explain the nature of the investments. The investor is seeking $100,000; the case is pending.  

What is a Suitable Investment? 

A broker who recommends a security is subject to ethical standards. One such standard is known as the suitability rule, also known as  FINRA Rule 2111.  

FINRA Rule 2111. requires registered financial advisors to have a "reasonable basis" for recommending a transaction or investment strategy. 

According to FINRA, the three prongs of a suitability determination are 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. This means they have an obligation to understand an investment strategy and its potential risks or rewards. 
  1. Customer-specific Suitability: Before recommending a particular security or investment strategy involving a specific client, 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.  
  1. 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.  

Protect yourself from securities fraud and contact the securities attorneys of Kurta Law if you have any reason to believe you may be the victim of an unsuitable recommendation.  

Background Information 

Roy Budd 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 5 - Interest Rate Options Examination 
  • PC - AMEX Put and Call Exam 
  • Series 1 - Registered Representative Examination 
  • Series 53 - Municipal Securities Principal Examination  
  • Series 4 - Registered Options Principal Examination 
  • Series 24 - General Securities Principal Examination 

Roy Budd is a registered broker in 16 states. He is also a registered investment advisor in New Jersey. 

Other than Morgan Stanley, Roy Budd has worked with the following firms: 

  • Citigroup Global Markets (CRD#:7059) 
  • Dean Witter Reynolds (CRD#:7556) 
  • Reynolds Securities (CRD#:712) 

 Kurta Law Can Help 

If you have worked with Roy Budd and have concerns about your investments, don't hesitate to 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.