Florida investment advisor and broker Leo Galanti has a customer dispute filed with FINRA disclosed on his Brokercheck page. The dispute was filed on October 1, 2020 alleging unsuitable investment recommendations using margin. The customer is seeking $1,200,000 for the alleged damages. The dispute is under review by attorney Alan Rosca.
Securities lawyer Alan Rosca of the Rosca Scarlato LLC law firm is investigating broker Leo Galanti’s and his involvement in the unsuitability allegations. Investors who believe they may have lost money due to Leo Galanti’s alleged broker misconduct are encouraged to contact attorney Alan Rosca for a free, no obligation discussion about their options. Call 888-998-0530, email at arosca@rscounsel.law, or through the contact form on this page.
Broker Leo Galanti Has Been Employed with FINRA Since 1973 and Switched Employers Seven Times
As reported on his FINRA Brokercheck page, Leo Galanti joined the securities industry in May 19733. Galanti was first employed with NML Equity Services from May 1973 until November 1975.
He started working for Lincoln Financial Advisors Corporation in October 1975 and remained there until December 1979. He was also employed with The Lincoln National Life Insurance Company in October 1975 and remained there until December 1979 as well.
He then switched to Raymond James Financial Services in January 1991 and remained there until October 2009.
Registered broker Leo Galanti is currently employed with Raymond James Financial Services Advisors located in Stuart, Florida. Galanti has been registered with this firm since March 2009.
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What is an Unsuitable Investment?
Generally speaking, an unsuitable investment is an investment such as a stock or bond that does not meet the investment objectives and means of an investor, among other suitability factors. An investment strategy can also be unsuitable, such as, when the customer’s portfolio asset mix is improper, or the investments purchased may be too aggressive or unfit for the investor’s risk tolerance.
Suitability depends on each investor’s situation. What could be unsuitable for one investor, may not be unsuitable for the other. The key to understanding unsuitability is that each and every investor is different. On that note, financial professionals must take every customer’s investment profile in consideration. A customer’s investment profile includes age, other investments, income, financial situation, liquidity needs, tax status, risk tolerance, lifestyle, personal preferences, and other factors.
An investor’s age is typically an important factor when determining suitability. An older investor may not be able to withstand fluctuations in their portfolio compared to younger investors who may be able to withstand larger fluctuations in their portfolio if the funds will not be needed until later in life.
When a financial professional has a clear understanding of the investor’s profile, it is their job and more importantly, their duty to put together a portfolio that reflects the investor’s needs and preferences in accordance with suitability obligations.
FINRA Rules on Unsuitability
The Financial Industry Regulatory Authority (FINRA) has defined the standards for investment recommendations made by firms and advisors. Financial professionals must have a firm understanding of both the product and the customer, according to FINRA Rule 2011.
The rule requires that a firm or associated person have a clear understanding of the investor’s profile and needs in order to have a reasonable basis to believe a recommended transaction or investment strategy involving a security or securities is suitable for the customer.
FINRA Conduct Rule 2111 focuses on three fundamental concepts:
- Reasonable-basis suitability: Based on reasonable diligence, a broker is required to have a reasonable basis to believe that the recommendation is suitable for at least some investors. Reasonable diligence must provide the firm or associated person with an understanding of the potential risks and rewards of the recommended security or strategy.
- Customer-specific suitability: Based on a customer’s investment profile, a broker should have a reasonable basis to believe the recommendation is suitable for that specific customer. The broker should analyze a broad array of customer-specific factors to support their recommendations.
- Quantitative suitability: A broker with actual or de facto control over a customer’s account is required to have a reasonable basis for believing that a series of recommended transactions is not excessive or unsuitable for the customer, in light of the customer’s investment profile.
Unsuitable investments can leave investors exposed to serious risks and losses. The possible risks include but are not limited to; creation of too much risk, assets may be locked up for too long, unacceptable levels of return, or generate losses that can damage an investor’s finances.
Although it may be challenging to determine whether an investment is suitable, brokers and firms are required by FINRA to conduct reasonable due diligence to obtain key information about an investor before offering investment opportunities.
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints or allegations mentioned in this article, unless otherwise indicated. Any reader should also read the original sources hyperlinked in this blog for accuracy, including any BrokerCheck report and/or record of any disciplinary or regulatory action. Those sources are incorporated by reference into the text of this blog, and are the governing materials in case of any inconsistencies or typos in this blog.
Have You Suffered a Loss from Unsuitable Investment Recommendations?
The Rosca Scarlato LLC law firm represents investors who lose money as a result of investment-related fraud or unsuitability and are currently investigating broker Leo Galanti’s alleged involvement in unsuitable recommendations.
The firm takes most cases of this type on a contingency fee basis and advances the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.
Investors who believe they lost money as a result of Leo Francis Galanti’s alleged involvement in unsuitable recommendations may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.
