According to FINRA, Richard Joseph Jackson (CRD #2224335), based in Long Beach, New York, was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for one month. The suspension was in effect from September 3, 2024, through October 2, 2024.
Without admitting or denying the findings, Jackson consented to the sanctions and to the entry of findings that he made promissory, unwarranted, and exaggerated claims in individual email communications he sent to customers. These communications included unwarranted predictions and projections of future performance. The emails were also found not to be fair and balanced because they omitted key risks associated with the specific stocks or industries discussed.
FINRA Rule 2210, which governs communications with the public, requires that all broker communications be fair, balanced, and not misleading. This means that when a broker discusses a potential investment, they must present both the potential benefits and the material risks. Making predictions or projections about future performance, particularly in a promissory or exaggerated manner, is a serious violation because it can lead investors to make decisions based on unrealistic expectations rather than sound analysis.
The securities industry has long recognized that predicting future market performance with certainty is impossible. When a broker presents such predictions as though they are reliable, they are misrepresenting the nature of investing and potentially leading customers toward inappropriate risk. Omitting key risks makes the situation worse by depriving investors of the information they need to make informed decisions. The requirement for balanced communications is fundamental to the principle of informed consent in securities transactions.
Investors should be cautious of any financial professional who makes bold predictions about future investment returns or who presents investment opportunities without discussing the associated risks. Legitimate investment advice always includes a discussion of potential downsides, market uncertainties, and the specific risks tied to particular securities or sectors. If a broker consistently presents an overly optimistic picture without acknowledging risks, that should be considered a red flag.
This case serves as a useful reminder that FINRA monitors not only formal marketing materials and advertisements but also individual email communications between brokers and their customers. All communications are subject to the same standards of fairness and balance. Investors who receive communications that seem too good to be true should consider verifying the claims independently and checking their broker's disciplinary record through FINRA BrokerCheck.
