Category: Investor Protection

Hanley Law Files FINRA Arbitration Involving broker Ronald Radner Former Registered Representative at the Delray Beach Florida Branch of Edward Jones

Hanley Law recently filed a FINRA arbitration claim alleging that Ronald Radner a broker formerly registered with Edward Jones solicited an elderly client into transferring his investment portfolio to his care after Radner hosted a “free lunch” seminar at a local deli.  The client alleges that Ronald Radner convinced him to surrender his American National annuity and to allow Ronald Radner to manage the funds from the surrendered annuity.  The client alleges that Ronald Radner convinced him that he could earn a greater rate of return on the funds, and therefore would be able to provide him with additional growth and income through retirement.

The client alleges that because of the recommendation of Ronald Radner and Edward Jones he incurred a large surrender charge, and also lost his substantial death benefit of nearly $400,000 when Mr. Radner surrendered his American National Annuity.  Furthermore, the client alleges that he incurred a large tax consequence because of Ronald Radner’s and Edward Jones’ recommendation that he surrender his American National annuity.  Additionally, the client alleges that he lost significant principal on the investments Ronald Radner purchased with his annuity proceeds.

The Boynton Beach, Florida retiree client alleges that Edward Jones violated industry rules, including but not limited to FINRA’s customer suitability standard (Rule 2310) as well as FINRA rules 3010 and 2110. The client further alleges that Edward Jones violated its duty of care and was negligent and that Edward Jones breached the contract it entered into with its client. The client alleges that Edward Jones also breached the fiduciary duty that a securities firm and its employees/agents owe to their clients.  The client alleges that Edward Jones’ misconduct constitutes common law fraud.  Moreover, the client alleges that the accounts at issue were handled negligently and Edward Jones was negligent in their hiring, retention, and supervision of their employees.

According to FINRA’s Brokercheck, Ronald Radner was registered with the securities industry for 9 years, and was registered with the following firm(s) and has multiple customer complaints:

Raymond James Financial Services, Inc.
CRD 6694
Delray Beach, FL
3/29/2019 – present

Edward Jones
CRD 250
Delray Beach, FL
9/30/2011 – 4/1/2019

Morgan Stanley Smith Barney
CRD 149777
Delray Beach, FL
10/4/2010 – 9/7/2011

HANLEY LAW

Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  Hanley Law is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  Hanley Law represents clients nationwide in cases against the major Wall Street broker dealers, including Edward Jones.

If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact Hanley Law to discuss your legal options. Contact Hanley Law at (239)649-0050 or contact us through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

 

FINRA Issues New Investor Alert, Frontier Funds—Travel With Care

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Frontier Funds—Travel With Care cautioning investors interested in funds that invest in frontier markets to carefully consider the heightened risks in these markets. While there is no precise definition of a frontier market, frontier funds generally invest in companies located in countries with developing securities markets such as Argentina, Lebanon, Nigeria, Slovenia and Vietnam.

“Investors seeking potentially higher returns in frontier funds should understand that the promise of higher returns always carries more risk—and the past performance of any fund is never a guarantee of future results,” said Gerri Walsh, FINRA’s Senior Vice President for Investor Education. “Before investing in a frontier fund, investors should consider whether and how such an investment might fit as part of a well-diversified portfolio.”

As with any investment, frontier funds have their pros and cons. Frontier Funds—Travel With Care, provides investors with a series of tips to avoid problems.

• Know which frontier markets the fund invests in. Risk factors vary by country—and no two countries share identical risk elements.
• Monitor changes in index components. If you are investing in a frontier ETF or index mutual fund, make sure you know and understand the index that the fund tracks and also the components of that index. The countries included in a frontier index can change over time.
• Geopolitical and currency risks are real. Be aware that some frontier markets are located in parts of the world with unstable political or market environments.
• Factor in costs and fees. Frontier fund costs and fees can be higher than their emerging market peers, and significantly higher than broadly diversified domestic and international managed funds.
• Consider Performance History. Frontier funds are relatively new, and most have limited performance histories.

Frontier Funds—Travel With Care
“Frontier funds” that invest in securities of companies in countries with developing securities markets—like Argentina, Lebanon, Nigeria, Slovenia and Vietnam—are gaining investor attention. Some see investing in frontier funds as a way to diversify assets—going beyond funds that invest in established international and other more developed emerging markets. Frontier funds are also sparking the interest of some investors who are lured predominantly by potential gains.

FINRA is issuing this alert to caution those interested in funds that invest in frontier markets to carefully consider the heightened risks in these markets. Frontier fund investments may provide potential diversification and periods of higher returns than can be obtained through more traditional investments. But products or asset niches that promise higher returns nearly always carry more risk—and the past performance of any fund is never a guarantee of future results.

Frontier Markets

There is no precise definition of a frontier market, or a country classified as such—but words like “small” and “illiquid” are often used to describe these markets.

Frontier economies tend to be smaller, and their markets for trading securities less developed, than emerging economies such as Brazil, Russia, India and China. In addition, compared to more established markets, the legal, financial accounting and regulatory infrastructure of frontier markets may be weaker or less developed, and political stability may be more of a concern. Financial market depth and breadth also may be more limited, and capital flows may be more restricted. Frontier markets may have less investor participation, fewer large global companies and limited international trade compared to established and emerging economies.

At the same time, frontier market countries are often characterized by populations that are making strides in education and entrepreneurship, an expanding economy and a rising standard of living.

Frontier Funds

Currently, there are a limited number of funds that focus specifically on frontier markets. Just as every frontier market is different, so is every frontier fund. Some funds invest in more than 30 frontier markets around the globe. Others invest more narrowly, perhaps focusing on only one region such as Asia, Africa or the Middle East—or even one country. Some mutual funds and exchange-traded funds (ETFs) may concentrate their holdings in a single or small number of economic sectors—such as banking, energy or agriculture—within various frontier markets. Others may track an index that encompasses virtually all of the countries in the frontier market universe. Still other funds invest in both frontier and the generally larger and more developed emerging markets, and some global or international funds may allow for sizable allocations to frontier markets.

A frontier fund that is registered under U.S. law—whether it is a mutual fund, ETF or closed-end fund—is required to provide investors with a prospectus that details the fund’s investment objective, major holdings or index that it tracks, historical returns and information about fees and risks. Think of this prospectus as your “frontier market guide,” complete with advisories and warnings. Read it carefully before you invest. Most frontier funds are designated for “aggressive growth” and described as high risk. Investors interested in frontier funds should carefully consider whether and how such an investment might fit as part of a well-diversified portfolio.

Before You Invest

Like any investment, frontier funds have their pros and cons. Before you invest, here are some tips to help you avoid problems:

• Know which frontier markets the fund invests in. Risk factors vary by country—and no two countries share identical risk elements. Read the fund’s prospectus to determine whether you are buying a fund that is or may become broadly diversified across many frontier markets, or that narrowly invests in only a few frontier markets, sectors or a single region or country.

• Monitor changes in index components. If you are investing in a frontier ETF or index mutual fund, make sure you know and understand the index that the fund tracks and also the components of that index. Be aware that the components or “constituents” of an index can change, potentially affecting the return of the fund. For example, components of the MSCI Frontier 100 Index are undergoing changes after Qatar and the United Arab Emirates—which accounted for more than 30 percent of the value of the MSCI index—were reclassified from “frontier” to “emerging” markets. Following a transition period over several months, these markets will no longer be represented in the index.

• Geopolitical and currency risks are real. Be aware that some frontier markets are located in parts of the world with unstable political or market environments. Regional conflict, civil unrest and regime change are all significant risk factors, as is the risk that currency exchange rates may fluctuate, resulting in changes in the value of a given fund.

• Factor in costs and fees. Frontier fund costs and fees can be higher than their emerging market peers, and significantly higher than broadly diversified domestic and international managed funds. Even small differences in expenses can make a big difference in your return over time, so it’s important to know just how much you are paying for your investment. Use FINRA’s Fund Analyzer to help you compare how sales loads, fees and other fund expenses can impact your return. ETFs have a fee structure that includes trading fees, which can add up if you plan to actively buy and sell.

• Learn as much as you can about the fund manager. Understanding frontier markets and managing investments is a specialized skill. Research the fund manager’s professional experience, including fund management tenure and performance record. Research the professional background of a fund manager and the broker selling you the fund using FINRA BrokerCheck.

• Performance History. Frontier funds are relatively new and most have limited performance histories. Like all investments, performance may fluctuate. You can lose money.

As with any investment that holds out the potential for greater returns, it pays to ask whether you are willing to take on the higher risk that comes with it. In short, are you comfortable with a higher risk of significant investment losses? If not, an investment in frontier funds may not be a destination you want for portfolio.

If you suffered investment losses, please contact the Hanley Law to explore your legal options. The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of securities fraud, you may be able to recover your financial losses. Contact us today toll free at (239) 649-0050 for a free initial consultation.