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Lee Weiss – Investor Alert

Did you lose money investing with Lee Weiss (CRD# 2270372)?

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

As of May 1, 2020, Lee Weiss’s FINRA BrokerCheck Report contains the following:

BARRED: The SEC has barred this individual from acting as a broker or investment adviser or otherwise associating with firms that sell securities or provide investment advice to the public.

Disclosure Events

7 Customer Dispute(s)

1 Regulatory Event(s)

1 Civil Disclosure(s)

Updates

UPDATE 5/1/2020: According to a press announcement yesterday, U.S. Attorney William M. McSwain announced that Lee Weiss, 51, of Newton, Massachusetts, was reportedly charged with six counts of wire fraud and two counts of mail fraud. The charges are in connection with Weiss’s alleged multi-year investment scam that reportedly targeted his own clients and caused investor losses of more than $10 million. Weiss, an investment advisor and the principal of Family Endowment Partners, LP, purportedly defrauded his own clients of millions of dollars through investments in a now defunct Florida tobacco company and a series of private securities offerings. According to reports, Weiss allegedly told his clients he was investing their money but instead he was using it to make Ponzi payments and to pay for his own personal expenses.  He allegedly defrauded his investors of millions of dollars. Weiss reportedly lied to his clients, to prevent them from learning about his alleged scheme, and to convince them to continue paying him fees for “managing” their money. He purportedly told them  that they were making money when in fact,  their funds had already been stolen. If convicted, Weiss reportedly faces a maximum possible sentence of 160 years’ imprisonment, a $2 million fine, 3 years’ supervised release, an $800 special assessment, mandatory restitution, and forfeiture.

Current and Previous Registrations

01/03/2014 – 02/26/2016 MIP GLOBAL, INC. (CRD#:164640) SAN JUAN, PR
FINRA expelled the firm on 06/19/2017
03/01/2011 – 08/24/2015 STILLPOINT CAPITAL, LLC (CRD#:133146) TAMPA, FL
01/08/2009 – 03/30/2009 FEP INVESTMENTS LLC (CRD#:147152) BOSTON, MA
01/05/2004 – 09/05/2007 FIDELITY BROKERAGE SERVICES LLC (CRD#:7784) BOSTON, MA
10/11/1992 – 11/12/2003 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (CRD#:7691) NEW YORK, NY

Due Diligence Requirement

FINRA requires broker’s 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.”

Brokers and the brokerage firms they work for 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 Lee Weiss 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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