According to FINRA, Austin Richard Dutton Jr. (CRD #2739167), based in Furlong, Pennsylvania, was named as a respondent in a FINRA complaint filed on January 5, 2024. It is important to note that the issuance of a disciplinary complaint represents the initiation of a formal proceeding in which findings as to the allegations have not been made, and does not represent a decision as to any of the allegations contained in the complaint.
Dutton is alleged to have recommended that customers, most of whom were retired or approaching retirement, purchase illiquid alternative investments without having a reasonable basis to believe that these purchases were suitable for each of the customers. The complaint alleges that the alternative investments were all speculative investments that involved a high degree of risk. However, as the customers informed Dutton, none of them were seeking to make speculative, high-risk investments. Each of the customers reportedly had limited or no investment experience and none had ever purchased alternative investments. Many relied on their savings for income, and none were able to financially bear the risks associated with alternative investments. Nevertheless, Dutton is accused of recommending that the customers use a significant portion of their retirement savings to purchase these products.
The complaint alleges that Dutton's recommendations were unsuitable based on the customers' investment profiles, including their net worths, investable assets, annual incomes, investment objectives, and risk tolerances. Dutton allegedly generated more than $72,000 in commissions from these recommendations.
Dutton is also charged with falsifying his member firm's books and records, causing numerous documents including new account documents, Direct Business Profile and Agreement forms, Accredited Investor Forms, and Suitability Forms to contain false and inaccurate information regarding customers' suitability profiles and purchases.
Additionally, the complaint alleges that Dutton failed to respond to FINRA's requests for information and documents in connection with its investigation, and in a separate investigation into whether he engaged in a private securities transaction. Dutton reportedly responded to one request only after the near-completion of a FINRA Rule 9552 proceeding that would have resulted in his bar from the industry.
Investors should understand that these are allegations that have not yet been proven. However, this case illustrates the importance of understanding the risks of alternative investments and ensuring that any recommendations made by a financial professional align with your stated investment objectives and risk tolerance. Investors can monitor the progress of this case through FINRA's Disciplinary Actions Online search tool.
(FINRA Case #2018059178401)
