Stock broker and investment advisor David Joseph Schmerber (CRD#: 2093918) of Centerville, Ohio is involved in a $1 million customer dispute relating to allegations that he recommended various complex, volatile, and speculative securities which were unsuitable for the customers’ investment objectives. During the relevant time period, Mr. Schmerber was registered with the firm LPL Financial, LLC (CRD#:6413).
Stock brokers have a duty to recommend suitable investments and investment strategies to their clients. A recommendation is only suitable if it comports with the client’s investment objectives, risk tolerance, investment experience, investment time horizon, liquidity needs, and income needs. The duty to recommend suitable investments cannot be disclaimed through risk disclosures or waivers.
Breach of Fiduciary Duty
Investment advisors like Mr. Schmerber are fiduciaries under state and federal law. This means that they have a duty to act in a manner that they reasonably believe is in the best interest of their clients. They also have duties of honesty, loyalty, care, and disclosure. A breach of fiduciary duty occurs when a financial advisor violates the trust and confidence that has been reposed in him or her by the client.