Investors File Complaints Against Cetera Investment Services

Arcadia broker/adviser Cathy Wu (CRD# 4924232[1]) is involved in pending customer disputes. According to her Financial Industry Regulatory Authority (FINRA) BrokerCheck report, accessed on February 24, 2022, she is currently registered with Cetera Investment Services. Also registered with the firm’s offices in Torrance and Palos Verde, California, she is alternately known as Ping Shuang Wu.

Complaints: Wu Made Unsuitable Recommendations

Ms. Wu’s BrokerCheck report describes two pending customer complaints involving her. Both filed in 2021, the complaints allege she recommended unsuitable investments in real estate securities. The claimants, whose allegations have not been proven, seek a cumulative total of $405,000 in damages.

Understanding FINRA’s Suitability Rule

The complaints listed on Ms. Wu’s BrokerCheck report describe a relatively common allegation of broker misconduct. One of the most important standards governing securities brokers is suitability, which holds that brokers must recommend only investments which they have a reasonable basis to believe are suitable for their clients’ investment profiles. As FINRA Rule 2111[2] explains, there are three types of suitability. One is reasonable-basis suitability, which describes a broker’s duty to have a reasonable basis to believe a given investment recommendation is suitable for “at least some investors.” A second is “customer-specific suitability,” which describes a broker’s duty to have a reasonable basis to believe a given investment recommendation is suitable for the customer they’re recommending it to. Finally, the “quantitative suitability standard” holds that brokers with “actual or de facto control over a customer’s account” must have a reasonable basis to believe that a series of transactions are not excessive or unsuitable for the customer, even if they are “suitable when viewed in isolation.”

To determine whether an investment or investment strategy is suitable for their customer, a broker first determines the customer’s investment profile[3]. This is a set of information that includes the client’s age, net worth, income, investment experience, investment objectives, risk tolerance, and more. An illiquid non-traded real estate investment trust, for instance, could be considered unsuitable for an investor with immediate liquidity needs. By that same token, speculative options investments could be considered unsuitable for an elderly investor with a short-term investment horizon and income-generation needs. More information on the suitability standard is available via FINRA[4].

Wu Registered with Cetera Investment Services

Cathy Wu, also known as Ping Shuang Wu, started working at Cetera Investment Services in 2013. She is based out of the firm’s offices in Arcadia, Torrance, and Palos Verdes, California. Before she joined Cetera, she was affiliated UBS Financial Services in Pasadena, California and UCB Investment Services in Industry, California. She has passed four securities industry examinations, according to FINRA, including the Series 66 and the Series 7. For more information about her 14 years of experience in the securities industry, visit her FINRA-maintained BrokerCheck report[5]. (The above-referenced information was accessed on February 24, 2022.)

Complaint Against Cetera Investment Services?

MDF Law Can Help Have you lost money investing with Cathy Wu or Cetera Investment Services? The securities fraud attorneys[6] at MDF Law may be able to help you recoup your losses. With decades of experience advocating for investors, our attorneys have recovered tens of millions of dollars for their clients. We take cases on contingency—you only pay a fee if you win—and currently offer free consultations nationwide. Call 800-767-8040 to speak with one of our attorneys today.