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Timothy Yee Embroiled in Unsuitability Dispute

Timothy Yee (CRD #:2492578), a broker and investment advisor registered with Independent Financial Group, is involved in an unsuitability dispute, according to his BrokerCheck record, accessed on January 7, 2022. 

Investor Allegations 

On October 25, 2021, an investor filed a dispute against Timothy Yee, alleging the investments he recommended were not suitable for her and were not in line with her stated objectives. The damage amount requested is $68,000the case is still pending. 

What is Unsuitability? 

“Unsuitability” is a term used to describe inappropriate recommendations and trades that are inconsistent with the customer’s goals and investment profile. 

Under FINRA Rule 2111, a customer’s investment profile consists of a wide range of individual characteristics, including the customer’s: 

  • Age 
  • Financial situation and needs 
  • Tax status 
  • Investment objectives 
  • Investment experience 
  • Risk tolerance. 

Brokers have a duty to give advice and recommend investments that are in the best interest of their customers. They should take into account any risk tolerances or goals the person has expressed before making recommendations and if those preferences change over time.  

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

Undisclosed Private Securities Transactions 

According to an Acceptance, Waiver, and Consent agreement dated January 13, 2016, Timothy Yee consented to the findings that and his spouse participated in private securities transactions by purchasing securities in privately-held companies using personal funds, without providing written notice to his member firm and obtaining its approval violating FINRA Rules 3280 and 2010.  

FINRA also alleges that Timothy Yee solicited three customers to invest in one of the privately held companies without providing written notice to LPL and obtaining its approval.  

Timothy Yee did not provide written notice or receive approval from his member firm to engage in any of these transactions. The findings further state that in December 2014, Timothy Yee inaccurately stated on a questionnaire he submitted to LPL that he had not participated in any private securities transactions. 

FINRA Rule 3280 

FINRA Rule 3280 states that before participating in any private securities transaction, a registered broker should provide written notice to his/her member firm describing in detail the proposed transaction and proposed role. The broker should also state whether he/she has received or may receive selling compensation in connection with the transaction. 

A violation of FINRA Rule 3280 is also a violation of FINRA Rule 2010, which requires associated persons to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business. 

FINRA Suspension and Fine 

As part of the AWC, Timothy Yee consented to the following FINRA sanctions 

  1. A 15-day suspension 
  1. A $7,500 fine 

You can read the whole AWC here. 

Employment Termination 

On May 26, 2015, LPL Financial fired Timothy Yee after he allegedly participated in private securities transactions without providing written notice to and obtaining written approval from the firm. 

Background Information 

Timothy Yee has passed the following exams: 

  • Series 66 – Uniform Combined State Law Examination 
  • Series 65 – Uniform Investment Adviser Law Examination 
  • 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 
  • Series 24 – General Securities Principal Examination 
  • Series 8 – General Securities Sales Supervisor Examination (Options Module & General Module) 

Timothy Yee is a registered broker in 23 states. He is also a registered investment advisor in Texas and California. 

Timothy Yee has also worked with the following firms: 

  • SII Investments (CRD#:2225) 
  • AIG Financial Advisors (CRD#:133763) 
  • SunAmerica Securities (CRD#:20068) 
  • T. Rowe Price Advisory Services (CRD#:108958) 
  • T. Rowe Price Investment Services (CRD#:8348) 
  • Banc Of America Investment Services (CRD#:16361) 
  • BA Investment Services (CRD#:12965) 
  • Wells Fargo Securities (CRD#:17438) 

Kurta Law Can Help 

If you have worked with Timothy Yee and have concerns about your investments, don’t hesitate to contact us today at 877-600-0098 or for a free consultation. 

For nearly 20 years, Kurta Law has advocated for investors 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.