Brokerage Firm Review: PFS Investments Inc.

PFS Investments Inc. (“PFS Investments”) (CRD#10111) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated PFS Investments, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.

If you believe you have a claim against PFS Investments, you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Can I Sue PFS Investments?

If you’ve lost money caused by PFS Investments and/or its employees’ misconduct then the answer is, YES, you can sue PFS Investments, but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue PFS Investments in FINRA arbitration proceedings but WIN that arbitration. The easiest way to know if you have a viable case against PFS Investments is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is PFS Investments?

PFS Investments (CRD#10111) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors.

As a registered broker-dealer, PFS Investments is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests.

A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.

PFS Investments Has Many Different Regulatory Problems 

PFS Investments’ rapid growth has not been without consequences. There have been approximately 20 state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) for a violation(s) of investment-related rules or regulations. In addition, there have been customer complaints filed against PFS Investments  for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record. 

We have reported and written about these regulatory problems and customer complaints over many years. PFS Investments is a repeat offender: there are over 20 FINRA-reported proceedings citing the firm with one form of supervisory lapses or another.

A Brief Overview of Some of the Regulatory Problems PFS Investments Has Faced Over the Years*

PFS Investments has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:

Maine Office of Securities Fines PFS Investments for Failure to Comply with An Order on Inspections of Branch Offices in Maine

Brief Overview: The Maine Office of Securities initiated an investigation into PFS Investments that revealed the firm failed to comply with an order regarding the resumption of on-site broker-dealer inspections of branch offices in Maine. The Office of Securities issued a consent agreement to the firm, which PFS Investments signed. The firm also paid a civil fine to the Maine Office of Securities.

Massachusetts Securities Division Censures and Fines PFS Investments for Unregistered Supervisors Overseeing Transactions in Massachusetts

Brief Overview: The Massachusetts Securities Division initiated an investigation into PFS Investments and alleged that the firm allowed branch managers, who were at offices located outside of Massachusetts, were not themselves registered in Massachusetts to supervise PFS Investments agents transacting securities business with Massachusetts residents in violation of the Massachusetts Securities Act. The firm consented to the entry of an order and agreed to undertake and correct deficiencies.  As a result, the firm was censured and fined $75,000.

FINRA Censures and Fines PFS Investments for Supervisory Failures Concerning Customer Account Information

Brief Overview: Without admitting or denying the findings, PFS Investments consented to the described sanctions and to the entry of FINRA findings that the firm 1) did not provide certain clients with copies of their account information within 30 days after the account being opened and every 36 months thereafter and 2) that the firm’s investor profile questionnaire form had deficiencies as to certain firm customers who made short-term investments in mutual funds. FINRA also alleged that the firm’s supervisory system and written supervisory procedures failed to detect the deficiencies. The Firm ultimately entered into an agreement with FINRA on those matters. As a result, the firm was censured and fined $100,000.

FINRA Censures and Fines PFS Investments for Failure to Retain Documents Pertinent to Account Application Packages

Brief Overview: Without admitting or denying the allegations, PFS Investments consented to sanctions and entry of FINRA findings that the firm failed to retain copies of a pre-printed form receipt contained in its standard account application package as required by SEC rules. The firm agreed to undertake and correct deficiencies and agreed that the firm’s compliance director will certify to FINRA staff that deficiencies have been corrected.  As a result, the firm was censured and fined.

NASD Censures and Fines PFS Investments for Failure to Timely Amend Forms U4 and U5

Brief Overview: The NASD initiated an investigation into PFS Investments that revealed that the firm failed to file in a timely manner certain amendments to Forms U4 and U5 as required by the NASD. FINRA said the firm’s supervisory system and procedures were not reasonably designed to achieve compliance with its reporting obligations. The firm agreed to conduct a series of internal audits to evaluate the effectiveness of its system for ensuring the timely filing of amendments to the forms. As a result, the firm was censured and fined $450,000.

Why Does PFS Investments Have So Many Regulatory Problems And Customer Complaints?

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of many franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers. 

Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.

These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.

Did PFS Investments Advisor Misconduct Cause You Investment Losses?

When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. PFS Investments is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting PFS Investments without representation with an attorney about their complaints and have their complaints denied.

Related Read: Can You Sue Your Brokerage Firm?

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By PFS Investments Today!

The investment loss attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with PFS Investments cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.

Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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