WSJ Warns Florida Seniors About Broker Free Lunch Seminars
The Wall Street Journal recently analyzed where most of nation’s estimated 630,000 stockbrokers work and found at least five “hot spots” in Florida alone. The Journal identified Palm Beach County as having “one of the highest rates of troubled brokers” in the country, largely due to the presence of a high number of persons over 65 with more than $100,000 in annual income. The other Florida hot spots identified by the Journal were Sarasota, Collier and Lee Counties, Miami-Dade, and Fort Lauderdale/Boca Raton.
Are You Dealing With a “Troubled” Broker?
The Journal focused on Delray Beach stockbroker Rafael Golan as an example of a “troubled” broker operating within one of the identified hot spots. Golan regularly solicits clients through financial seminars, essentially offering elderly investors a free meal in exchange for hearing his pitch. Golan said the dinner seminars are a form of “prospecting” similar to searching for gold.
The Journal identified several complaints and regulatory actions against Golan. In 2010, a Delray Beach jury ordered him to pay $272,000 in damages to the widow of a former client. The plaintiff claimed she lost $32,000 in a transaction where Golan made $15,000. The jury ordered Golan to pay back the $32,000 plus additional punitive and compensatory damages. Golan denied any wrongdoing to the Journal and claimed the jury “just made up some numbers.”
The Journal noted that Golan has other marks on his record. In August 2012, the Florida Department of Financial Services reported a $10,000 fine against Golan. Shortly thereafter, he was fined an additional $2,000 by Florida securities regulators for failing to disclose the earlier fine. The Journal reported the $10,000 fine came as the result of another widow who purchased an “unsuitable annuity” from Golan. He again denied wrongdoing and claimed Florida officials did not conduct a proper investigation.
The Journal’s survey found there were about 3,000 brokers “within 10 miles of Mr. Golan’s office.” About 1 out of 17 of those brokers had “three or more disciplinary flags over their careers,” a figure that is “three times the national average.”
There’s No Such Thing as a Free Meal
The tactics used by Golan and other brokers in so-called hot spots have raised concerns within the securities industry. The North American Securities Administrators Association (NASAA), which represents state-level regulators in the United States, Canada and Mexico, has issued an investor alert warning of the potential dangers of “free meal seminars.”
Free meal seminars are often advertised in local papers as educational workshops rather than sales pitches. But according to the NASAA, “many of these seminars are intended to result in the attendees’ opening new accounts with the sponsoring firm, and ultimately, in the sales of investment products.” Seminar promoters may also “use the promise of high commissions to lure brokers, insurance agents, investment advisers, accountants, and lawyers, some of them not licensed to sell securities, into offering investments they may know little about.”
If you attended a free lunch seminar and now have second thoughts about an investment made after attending one of these seminars, or if you have purchased securities or other investment products that you now have questions about, contact Boca Raton attorney Gregory Tendrich, P.A., today.