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Stephens – Investor Alert

Did you suffer investment losses with Stephens (CRD# 3496) (SEC# 801-15510, 8-1927)?

StephensGalvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing with Stephens. If you suffered losses investing with Stephens, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim.

As of April 4, 2020, Stephens’s FINRA BrokerCheck Report contains the following:

46 Regulatory Event Disclosures

3 Civil Event Disclosures

3 Arbitration Disclosures

Bond Disclosures

Main Office Location

111 CENTER STREET
LITTLE ROCK, AR 72201-3507
UNITED STATES

Mailing Address

111 CENTER STREET
LITTLE ROCK, AR 72201-3507
UNITED STATES

Business Telephone Number

501-377-2000

Stephens’s Direct Owners and Executive Officers

SI HOLDINGS INC., SHAREHOLDER COMMON
BRADBURY, CURTIS FRANKLIN JR (CRD#:810347), SR EXEC VP, CHIEF OPERATING OFFICER, DIRECTOR
CHANEY, DONALD LAWRENCE (CRD#:4341765), SENIOR VICE PRESIDENT AND CHIEF COMPLIANCE OFFICER
DORAMUS, MARK CHRISTOPHER (CRD#:1888235), SENIOR EXECUTIVE VICE PRESIDENT/CFO/SECRETARY/TREASURES
HINES, ZOE ANN (CRD#:709945), EXECUTIVE VP, ASSISTANT CFO & CONTROLLER, DESIGNATED NYSE CHIEF OPERATIONS OFFICER
KNIGHT, DAVID ARCENEAUX (CRD#:1834998), EXECUTIVE VICE PRESIDENT/GENERAL COUNSEL
PRINCE, DAVID CANNON (CRD#:1636628), SENIOR VICE PRESIDENT/ASSOCIATE GENERAL COUNSEL, CHIEF COMPLIANCE OFFICER OF INVESTMENT ADVISOR
STEPHENS, WARREN AMERINE (CRD#:1033710), PRESIDENT/CEO/DIRECTOR

Due Diligence Requirement

FINRA requires broker-dealers to conduct due diligence on investments and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. FINRA Rule 2111(a) states that “a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”

Broker-Dealers that fail to conduct adequate due diligence on investments they recommend or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.

Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability.

(a) The reasonable-basis obligation requires a member or associated person to have a reasonable basis to believe, based on reasonable diligence, that the recommendation is suitable for at least some investors. In general, what constitutes reasonable diligence will vary depending on, among other things, the complexity of and risks associated with the security or investment strategy and the member’s or associated person’s familiarity with the security or investment strategy. A member’s or associated person’s reasonable diligence must provide the member or associated person with an understanding of the potential risks and rewards associated with the recommended security or strategy. The lack of such an understanding when recommending a security or strategy violates the suitability rule. Thus, brokerage firms had a duty to determine whether was suitable for at least some investors.
(b) The customer-specific obligation requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile, as delineated in Rule 2111(a).
(c) Quantitative suitability requires a member or associated person who has actual or de facto control over a customer account to have a reasonable basis for believing that a series of recommended transactions, even if suitable when viewed in isolation, are not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile, as delineated in Rule 2111(a). No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.

Request a Free Consultation with a Securities Attorney

If you suffered losses investing with Stephens and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.

This information is all publicly available and is being provided to you by Galvin Legal, PLLC.

Galvin Legal, PLLC is a national securities arbitration, securities mediation, securities litigation, securities fraud, securities regulation and compliance, and investor protection law practice. For more information on Galvin Legal, PLLC and its representation of investors, please visit www.galvinlegal.com or call 1-800-405-5117.

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