Fidelity Advisor Accused of Misleading Clients
Kelly Johnston, an advisor with Fidelity Brokerage Services, has come under fire for alleged misconduct resulting in a considerable loss for her client. Transparency and suitability are crucial when navigating the complex world of investments when operating as an advisor. Unfortunately, this allegation against Fidelity’s advisor Kelly Johnston raises serious concerns about potential misconduct and breach of fiduciary duty.
The team of securities fraud attorneys at Meyer Wilson are investigating this matter and recommend reaching out to our team if you work with Kelly Johnston.
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The $25 Million Allegation: Kelly Johnston’s Failure to Disclose Risks
A pending customer dispute filed on August 21, 2023, alleges that Kelly Johnston failed to disclose the potential for principal loss in fixed income mutual funds. Moreover, the complaint claims these investments were unsuitable for an SEC-registered public company client, resulting in a staggering $25 million in alleged damages.
The allegations against Kelly Johnston, if proven true, could have severe consequences for the financial advisor and her firm. Failure to disclose material investment risks and recommending unsuitable investments can constitute a breach of fiduciary duty and a violation of industry regulations.
The Financial Industry Regulatory Authority (FINRA) has established clear guidelines to protect investors and ensure transparency in the financial services industry. These guidelines are outlined in the FINRA Rules, which all registered brokers and advisors must adhere to.
Understanding FINRA’s Suitability and Disclosure Rules
- FINRA Rule 2111 (Suitability Rule) requires advisors to recommend suitable investments based on clients’ financial situations, risk tolerance, and objectives.
- FINRA Rule 2020 prohibits advisors from engaging in manipulative, deceptive, or fraudulent conduct, including failure to disclose material investment risks.
The Suitability Rule is a cornerstone of FINRA’s investor protection efforts. It mandates that advisors thoroughly understand their clients’ financial profiles and investment objectives before recommending any products or strategies. Failure to adhere to this rule can result in disciplinary action, including fines, suspensions, or even permanent bars from the industry.
Additionally, FINRA Rule 2020 emphasizes the importance of transparency and ethical conduct in the financial services industry. Advisors have a fiduciary duty to act in their clients’ best interests and disclose all material risks associated with any investment recommendations. Concealing or misrepresenting these risks can be considered fraudulent conduct, which is strictly prohibited.
Red Flags and Recovering Investment Losses
Investors should be vigilant for potential red flags, including:
- Failure to disclose material investment risks
- Recommending unsuitable investments
- Excessive trading or churning of accounts
- Unauthorized trading or misappropriation of funds
If you believe you have suffered losses due to your advisor’s misconduct, you may be able to recover your losses through FINRA arbitration.
Meyer Wilson is currently investigating, and if you have invested with Kelly Johnston, contact our nationally recognized securities fraud team at 866-938-2021 for a free consultation. We operate on a strict contingency fee basis meaning unless we can produce a recovery for you, our services are free.
To learn more about Kelly Johnston’s background and regulatory history, visit her FINRA BrokerCheck page.
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When You’ve Been Wronged, Trust the Experts at Meyer Wilson
When you entrust a stockbroker or financial advisor with your investments, you expect them to safeguard your future financial security. However, if that trust is broken through fraud, mismanagement, or unethical conduct, you need the right team on your side.
At Meyer Wilson, our experienced investment fraud attorneys have been fighting for clients like you since 1999. With over $350 million recovered for over 1,000 clients, we have the expertise and firepower to level the playing field against Wall Street.
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- David Meyer has been voted to Best Lawyers in America for over a decade
- David Meyer is the Immediate Past-President of Public Investors Advocate Bar Association (PIABA)
- Seven lawyers and a full support team provide the firepower to take on Wall Street
If you or a loved one suffered significant losses due to investment misconduct, don’t hesitate. Contact Meyer Wilson today and let our team fight to recover your losses.
Written By: Courtney Werning, Esq.
Recovering Losses Caused by Investment Misconduct.