In July of 2017, Ameriprise got drilled in Portland, Oregon for a rare explained FINRA award for a burned investor. The Claimant investor asserted a suitability claim against the brokerage firm for recommendations made by the advisor. The Claimants asserted that Andrew Hall, a broker with Ameriprise mishandled accounts, acted negligently, breached fiduciary duty, violated Oregon securities laws and applicable regulation laws and made unsuitable recommendations. The causes of action relate to Claimants’ investments in First Trust Unit Investment Trust (UITs). The Panel found that Hall’s overall strategy was unsuitable. Hall took Claimants’ asset allocation to 100% equities, from 70%. Accounting for expected margin leverage, this amounted to 133% equity exposure. Hall compounded leverage by investing in UITs comprised of closed-end funds (“CEF”), many of which used leverage as a component
of their strategy. This further increased Claimants’ equity exposure. UITs are less liquid due to high costs, and CEFs were more volatile than comparable investments in similar asset classes. Hall compounded the unsuitable nature of the investments in February 2015, by selling the original UITs and placing fully 50% of Claimants’ portfolio in a single sector, which was tightly linked to oil prices—UITs of CEFs of master limited partnerships. The balance of the portfolio was invested in an unsuitable UIT, which was not diversified because it held only 12 – 13 individual stocks. The strategy was unsuitable for asset preservation and liquidity needs. The panel awarded the Claimants $191,772.00 in compensatory damages and Hall’s request for expungement was denied.
According to his online FINRA BrokerCheck report, Andrew Joseph Hall was previously registered with US Bancorp Piper Jaffray in Minneapolis, Minnesota from October 1995 until April 2001, Wachovia Securities in Portland, Oregon from April 2001 until March 2009 and Securities America in Portland from May 2009 until November 2010. He is currently registered with Ameriprise in Portland and has been since March 2009. He has two customer disputes against him.
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