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Thomas Baumann Subject of FINRA Investigation

May 9, 2022 Unsuitable Investments

Thomas Baumann (CRD #: 5254392), a previously registered broker, was investigated by FINRA, according to his BrokerCheck record, accessed on May 2, 2022. If you want to know more about Thomas Baumann’s conduct as a broker, keep reading.

FINRA Investigation

On March 25, 2022, FINRA made a preliminary recommendation that Thomas Baumann face disciplinary action based on allegations he engaged in excessive trading in clients’ accounts and recommended unsuitable active trading strategies.

The recommendation notes that these allegations are violations of FINRA Rules 2010, 2020, and 2111, and Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5.

FINRA Rule 2111

FINRA Rule 2111 defines suitable investments as those that match an investor’s profile. Excessive trading or churning of accounts violates the “reasonable basis” obligation of this rule, which requires all investments to be at least potentially suitable for a hypothetical investor. The high fees incurred by excessive trading cut into investors’ returns, making it a fundamentally unsuitable strategy. 

FINRA Rules 2020 and 2010

FINRA Rule 2020 prohibits the use of manipulation, deception, and other unethical means of influencing investors. Violations of Rule 2020 are frequently automatic violations of FINRA Rule 2010, which holds brokers to high standards of honorable conduct.

Investor Disputes

Three disputes filed from 2018-2020 allege Thomas Baumann misrepresented investments, made unsuitable investment recommendations, committed excessive trading, and breached his contract. These disputes were settled for a total of $82,999.99.

Tax Liens

Between 2017-2018, Thomas Baumann became the subject of a $127,249 tax liens.

Background Information

Thomas Baumann has passed the following exams:

  • Series 63 – Uniform Securities Agent State Law Examination
  • SIE – Securities Industry Essentials Examination
  • Series 7 – General Securities Representative Examination

He has also worked for the following firms:

  • Spartan Capital Securities  (CRD#:146251)
  • Brookstone Securities (CRD#:13366)
  • Rockwell Global Capital (CRD#:142485)
  • JHS Capital Advisors (CRD#:112097)
  • Pointe Capital (CRD#:112097)

Kurta Law Can Help

If you worked with Thomas Baumann 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.