New York Securities Fraud Lawyers Blog
FINRA recently announced a Letter of Acceptance, Waiver, and Consent settling claims against TradeStation Securities, Inc. (“TradeStation”) for violating FINRA Rules related to communications with the public regarding cryptocurrency investments offered by an affiliated company. FINRA alleged that, between July and September 2022, TradeStation distributed retail communications concerning crypto assets or services which failed to clearly disclose that the products or services were not being offered through a registered broker-dealer. FINRA also alleged that TradeStation failed to provide a fair and balanced presentation of the benefits and risks of the products discussed in its retail communications. For its violations of FINRA Rule 2210 and Rule 2010, TradeStation agreed to pay $85,000 in fines. If you were misled into making investments in volatile investments without full disclosure of the risks involved, you should contact an experienced securities litigation law firm, like Malecki Law in New York City, to review your account and to determine whether your losses are recoverable.
FINRA Rule 2210 relates to communications with the public initiated by a FINRA member firm and requires the member firm to base retail communications on fair dealing and good faith, as well as to avoid misleading, exaggerated, or false statements of material fact. Rule 2210 further requires member firms to prominently disclose the name of the member firm in such communication and to identify the relationship with any non-FINRA members identified in such communication. Similarly, FINRA Rule 2010 requires member firms to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business. If you were promised a “safe” investment that has experienced considerable losses, you should speak with a seasoned securities attorney, like the attorneys at Malecki Law in New York, to determine whether your financial professional breached duties owed to you.
FINRA flagged numerous communications offered by TradeStation on its website and social media profiles that were in violation of FINRA Rules because of the communications’ propensity to mislead retail investors. FINRA’s investigation was spurred by TradeStation distributing multiple retail communications indicating that it offered crypto products to the public. In reality, the crypto products were being offered by a non-FINRA member affiliate of TradeStation. Worse yet, the crypto affiliate required customers to open TradeStation brokerage accounts to facilitate the transactions, which was never prominently disclosed in the retail communications. FINRA discovered some communications that, in its view, did not offer a complete picture as to the risks associated with the crypto products offered. FINRA determined that the violative conduct ceased because TradeStation’s affiliate stopped offering crypto products and services to the public. If you are a conservative investor whose broker recommended crypto investments, you should consult a securities fraud lawyer, like the lawyers at Malecki Law in downtown Manhattan, to determine whether such recommendations were in your best interests.
Although FINRA firms are required to publish communications with retail investors in accordance with FINRA Rule 2210, public investors should remain weary of products and services offerings that seem too good to be true. Virtually every form of investment comes with some discernable level of risk, so investment marketing materials that do not address the investment’s level of risk should raise red flags. Further, not all investment products are appropriate for all investors. If you are a conservative investors, investing in volatile assets, like crypto, might not be in your best interests. If you ever have questions or need more information about a potential investment, you should speak with your brokerage firm or financial professional before making such investment. Malecki Law stands ready to aid retail investors who have been misled into making risky investments by their financial professional without proper disclosures of the risk. If you have suffered losses in your brokerage account due to following the recommendations of your stock broker, contact Malecki Law at (212) 943-1233 for a free consultation.