Wenjinn James Chang, a registered broker and investment adviser based, is the subject of a customer dispute disclosure involving him on the allegation of unsuitable investments and over-concentration in risky investments, according to an investigation by securities attorney Alan Rosca, a partner with the Rosca Scarlato LLC firm.
Securities attorney Alan Rosca of the Rosca Scarlato LLC law firm is investigating conduct related to the customer dispute involving the Rockville broker Wenjinn Chang on the allegation of unsuitable investment recommendation and over-concentration in risky investments.
Wenjinn James Chang is currently registered with Independent Financial Group. Independent Financial Group is a Financial Industry Regulatory Authority (FINRA) member firm, and Chang was in the employment of the firm when he allegedly carried out the conducts related to the customer disputes.
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Wenjinn Chang Is the Subject of a Pending Customer Dispute
As reported on his FINRA brokercheck page, in a customer dispute instituted in February 2020, the client alleged that the investments recommended were unsuitable investments to them and the broker further over-concentrated their portfolio in risky investments. Owing from this, the client seeks to recover $128,000 in damages related to real estate and alternative investments.
It is important to note that this is not the first customer dispute disclosure involving the broker on these allegations.
In October 2018, another client alleged over concentration of portfolio with non-traded REITs. These were unsuitable investments which allegedly resulted in losses for the clients. The client sought $50,000 in damages from this action but it was eventually settled for $32,500.
In general, an investment recommendation will be said to be unsuitable to an investor where the investment is unsuitable in itself i.e. such investment is not an approved investment that is suitable for any investor at all; or the investment, where appropriate, it does not meet the specific investments of the client or the specific particulars and instructions of the clients are not put into consideration.
The specific client particulars to be considered range from the client’s age, financial and tax status, risk profile, elderly status and liquidity needs among others. The broker or investment adviser is expected to put all of these factors into consideration when recommending investments to the clients. In addition to this, the broker must also determine the appropriate quantity of each investment that would be suitable to the investors. Investments which do not satisfy these criteria will not be deemed as suitable.
Furthermore, every investor is always looking to ensure the reduction of investment losses to the barest minimum. One of the ways this is achieved is through the diversification of the investor’s portfolio. This means that their portfolio contains investments in different types of securities in the appropriate quantity. This ensures that the risks on the investment are spread and thus lower.
Over-concentration will occur where the portfolio is largely invested in a single type of security. The effect of this is that the portfolio is riskier and more susceptible to losses as a drastic reduction in the value of that security will automatically affect the value of the investor’s portfolio. It is quite often that the over-concentration of the investor’s portfolio is not the express instruction of the investor.
It should be noted that the broker will be liable for losses arising out of such overconcentration. All these are general considerations, not necessarily applicable to any one case, and do not constitute legal advice. Investors looking for legal advice for their particular situation should contact a qualified lawyer and discuss about the facts applicable to their specific case.
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.
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Securities Lawyer Investigating
The Rosca Scarlato LLC law firm represents investors who lose money as a result of investment-related fraud or misconduct and is currently investigating conduct related to Wenjinn James Chang’s customer dispute disclosure on the allegation of unsuitable investment recommendation and over-concentration.
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 conducts related Wenjinn James Chang’s customer dispute disclosure on the allegation of unsuitable investment recommendation and over-concentration, 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.
