Did you suffer investment losses with RBC Capital Markets (CRD# 31194) (SEC# 801-13059, 8-45411)?
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing with RBC Capital Markets. If you suffered losses investing with RBC Capital Markets, 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 5, 2020, RBC Capital Markets’s FINRA BrokerCheck Report contains the following:
324 Regulatory Event Disclosures
2 Civil Event Disclosures
114 Arbitration Disclosures
7 Bond Disclosures
UPDATE 6/30/2020: According to FINRA’s December 2019 Disciplinary Actions: RBC Capital Markets, LLC (CRD #31194, New York, New York) October 17, 2019 – An AWC was issued in which the firm was censured, fined $2,900,000 and required to provide a written certification to FINRA that it has established and implemented a supervisory system and written procedures reasonably designed to achieve compliance with FINRA rules and the federal securities laws applicable to prospectus delivery. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish and maintain a reasonable supervisory system governing the delivery of prospectuses for exchange-traded funds (ETFs), exchange- traded notes (ETNs) and mutual funds and failed to enforce its WSPs. The findings stated that the firm’s prospectus delivery process for ETFs and ETNs involved manually inputting coding for individual securities into third-party software to trigger the delivery of a prospectus when a customer purchased the security. The firm relied on a single employee to manually assign the trailer codes to ETFs and ETNs on a security-by-security basis and had no supervisory systems or controls in place to monitor or supervise the employee’s performance of these duties. As a result, the firm did not detect that the employee had inadvertently caused the system to overwrite the trailer codes that triggered prospectus delivery and failed to identify new ETFs and ETNs requiring a trailer code. Even after discovering the extent of the coding errors, the firm’s efforts to address the issues were not effective. The firm’s supervisory system related to prospectus delivery for mutual funds also was not reasonably designed. The firm merged with an affiliate and began using a new automated vendor system to identify mutual fund purchases requiring prospectus delivery. The vendor system did not correctly designate for prospectus delivery certain customer mutual fund orders placed through the firm’s managed accounts platform. The firm’s supervisory system included a written procedure obligating it to designate an employee to conduct periodic supervisory reviews to determine whether products were properly coded for prospectus delivery. However, with respect to mutual funds, the firm failed to assign these supervisory duties, thereby failing to enforce this procedure, and thus these duties were not performed for more than eight years. As a result, the absence of appropriate coding for at least hundreds of thousands of mutual fund purchases was not discovered until FINRA’s investigation into this matter. The findings also stated that the firm failed to establish, maintain or enforce supervisory controls to test and verify that it was delivering ETF, ETN and mutual fund prospectuses where required. The absence of any testing by the firm in this area was particularly problematic given its prior disciplinary history, the fact that it added a new vendor system for mutual fund prospectus delivery and its reliance on one individual to manually code ETFs and ETNs with no supervisory oversight. These failures prevented the firm from detecting the significant ETF, ETN and mutual fund prospectus delivery failures and related supervisory deficiencies. The firm also failed to test the system modifications and surveillance procedures put in place to address the ETF and ETN coding errors that were previously discovered. This lack of post-implementation testing prevented the firm from identifying the failures that caused these new processes not to be implemented properly. The findings also included that the firm failed to deliver prospectuses where required for ETF, ETN and mutual fund purchases due to its failure to have reasonable supervisory systems and controls in place. (FINRA Case #2015046652401)
UPDATE 5/28/2020: On May 19, 2020, William Galvin, Secretary of the Commonwealth of Massachusetts, charged RBC Capital Markets with failing to supervise unsuitable trades. According to the Complaint, “Bruce Taylor Cameron (“Cameron”) is a registered representative of RBC Capital Markets (“RBC”). Over the course of nearly 20 years, Cameron has provided services to Massachusetts investors while working for RBC. Over the last decade, Cameron developed a one-size-fits-all investment strategy which ignored RBC’s internal compliance procedures, and RBC similarly failed to address Cameron’s actions. For much of this time, Cameron was registered as a broker-dealer agent and investment adviser representative in Massachusetts. Cameron joined RBC in 2002 and began recommending that his clients invest in a type of security known as a Master Limited Partnership (“MLP”) as early as 2013. MLPs are typically used in the energy sector and are a unique investment that combines the liquidity of a common stock with the tax liability of a partnership. The value of a given energy sector MLP product is tied directly to the price of the natural resource underlying the MLP, be it oil, natural gas, or other natural gas byproducts. As such, energy sector MLPs expose investors to significant risk of loss if the energy market fails to perform as expected. Additionally, the tax consequences of energy sector MLPs may be detrimental to retirement or other tax-exempt accounts. As such, the approach taken by Cameron caused significant harm to the retirement assets of Massachusetts investors. Cameron found his niche recommending MLPs and other energy sector securities to his clients, and by the mid-2010s, he made it the forefront of his practice. While RBC does not allow its advisers to concentrate more than 30% of a client’s account in a single sector, Cameron routinely invested 50% or more of his clients’ accounts in energy sector MLPs and securities. Cameron would also heavily invest his clients’ accounts in energy sector MLPs and securities irrespective of the clients’ circumstances, also directly against RBC’s policies. Cameron failed to adequately consider the investment objectives of his clients’ accounts when concentrating their assets in the energy sector. In total, Cameron recommended the purchase or sale of at least $30,000,000 worth of energy sector MLPs between 2013 and 2017.”
UPDATE 5/27/2020: In March 2020, a former client of Janney Montgomery Scott, RBC Capital Markets, and Tracey Schusterman won an award in a FINRA arbitration for compensatory damages for $152,674 plus 9% interest per annum until the sum is paid in full, plus fees for a total of $199,178 in damages granted.
Main Office Location
3 WORLD FINANCIAL CENTER
200 VESEY ST.
NEW YORK, NY 10281
60 S. 6TH STREET
MINNEAPOLIS, MN 55402-4400
Business Telephone Number
RBC Capital Markets’s Direct Owners and Executive Officers
RBC USA HOLDCO CORPORATION, DIRECT OWNER
ABRUSCI, MATTHEW DAMIEN (CRD#:4820950), HEAD OF U.S. CAPITAL MARKETS LAW GROUP
DOWNIE, DAVID CRAIG (CRD#:5077914), MD, CHIEF RISK OFFICER, USA
GIEGERICH, ROBERT ARTHUR (CRD#:5736294), PRINCIPAL FINANCIAL OFFICER
GORIUS, MARK PATRICK (CRD#:3169862), INTERIM USWM PRINCIPAL OPERATIONS OFFICER
KACHENOURA, AHMED (CRD#:4825331), MD, HEAD GLOBAL EQUITY LINKED PRODUCTS
MURPHY, THOMAS N (CRD#:4519183), MD, HEAD, US CM OPERATIONS
SAGISSOR, THOMAS STEVEN (CRD#:2429425), PRESIDENT OF RBC WEALTH MANAGEMENT, BOARD MEMBER
SMALL, ANDREW CHRISTOPHER (CRD#:3068715), SVP, CHIEF COMPLIANCE OFFICER, RBC WEALTH MANAGEMENT – U.S.
STOPNIK, MATTHEW ROSS (CRD#:2580834), CO-HEAD, US INVESTMENT BANKING & BOARD MEMBER
TAYLOR, RYAN JOSEPH (CRD#:4570484), CHIEF COMPLIANCE OFFICER, RBC CAPITAL MARKETS – U.S.
THORNE, BRETT LANE (CRD#:2523268), HEAD, CORRESPONDENT AND ADVISOR SERVICES
THURLOW, JOHN J (CRD#:5726613), MANAGING DIRECTOR, CHIEF OPERATING OFFICER & CHAIRMAN OF THE BOARD
YU, JONATHAN TSUN YIN (CRD#:7074967), NON-EMPLOYEE BOARD MEMBER
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.”
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. 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.
Request a Free Consultation with a Securities Attorney
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.
Formerly Known As, Aliases, and Affiliates
DAIN RAUSCHER INC, DAIN RAUSCHER INCORPORATED, INTERRA CLEARING SERVICES, INC., RBC ADVISOR SERVICES, RBC CORRESPONDENT SERVICES, RBC DAIN RAUSCHER, RBC DAIN RAUSCHER INC., RBC WEALTH MANAGEMENT, DAIN RAUSCHER INC, DAIN RAUSCHER INCORPORATED, INTERRA CLEARING SERVICES, INC., RBC ADVISOR SERVICES, RBC CORRESPONDENT SERVICES, RBC DAIN RAUSCHER, RBC DAIN RAUSCHER INC., RBC WEALTH MANAGEMENT