The U.S. self-regulatory organization FINRA has imposed a $5,000 fine on George Lincon of EKN Financial Services, Inc, for guaranteeing a customer against investment losses, reports Bill Singer of Forbes.com.
FINRA asserts Lincon’s guarantee was in violation of FINRA Rule 2010 and 2150, which, among other restrictions, prohibit against such measures on the grounds that these “practices undermine the credibility of the securities industry.”
Singer, however, questions FINRA’s intentions and argues such a guarantee from a broker may, in fact, be in clients’ best interest.
“What’s truly wrong about altering the client relationship from one in which you pay for each and every trade regardless of profitability, to one in which those recommending investments “guarantee” your principal against loss or are compensated solely from ensuing profits (if any),” says Singer in his rebuttal.
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