A New York City financial advisor has been sanctioned by the Financial Industry Regulatory Authority over exaggerated claims regarding stock performance, AdvisorHub reports.
Richard Joseph Jackson was suspended for one month and fined $5,000 for his actions. According to FINRA’s letter of acceptance, waiver and consent, the matter involves emails sent to at least 20 clients between January 2020 and November 2022.
In his communications, FINRA said Jackson made promissory, unwarranted, and exaggerated claims, including unwarranted predictions and projections of future performance. The authority added that the emails were not fair and balanced because they omitted key risks associated with the specific stocks or industries that were discussed.
For example, FINRA said that in March 2021, Jackson wrote to a customer that a technology company would “likely grow in excess of 20% per year for the next 5 years,” and that he predicted the company’s business …”will beat current Wall-Street expectations by a lot (Growth over 40%+).” Jackson wrote to another customer regarding a pharmaceutical company that he was very confident “this is a $1000+ stock within 12 to 36 months.”
Jackson was found to be in violation of FINRA Rule 2210(d)(l) involving General Standards, which includes the following restrictions:
(A) All member communications must be based on principles of fair dealing and good faith, must be fair and balanced, and must provide a sound basis for evaluating the facts in regard to any particular security or type of security, industry, or service. No member may omit any material fact or qualification if the omission, in light of the context of the material presented, would cause the communications to be misleading.
(B) No member may make any false, exaggerated, unwarranted, promissory or misleading statement or claim in any communication. No member may publish, circulate or distribute any communication that the member knows or has reason to know contains any untrue statement of a material fact or is otherwise false or misleading.
Jackson also violated FINRA Rule 2010 stating that members in the conduct of their business shall observe high standards of commercial honor and just and equitable principles of trade.
Jackson did not admit or deny the allegations but accepted and consented to FINRA’s findings.
Industry lawyer Marc S. Dobin, who was not involved in this case, told Advisor Hub, “Regulators are not eager to have brokers act like analysts. Trying to predict the future is probably the most cardinal of the sins that he committed.”
The attorneys at Lewitas Hyman have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Lewitas Hyman at (888) 655-6002 or through our online contact form for a no-cost evaluation of your matter.
