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Recent Regulatory Action and Termination Reveal Pattern of Misconduct
Investors who worked with broker Christopher L. Baugh (CRD# 3250943) may have grounds to pursue financial recovery for investment losses. Formerly registered with Raymond James Financial Services in Miramar, Florida, Baugh was sanctioned by the Arkansas Securities Department in August 2024 and subsequently discharged by his firm for conduct inconsistent with company policies.
The regulatory sanctions against Baugh involved allegations of unauthorized outside business activities, including receiving over $10,000 in direct compensation from clients for “Rabbi Trust” plans without proper firm approval. These violations, combined with his subsequent termination, raise serious concerns about potential securities fraud and breach of fiduciary duty.
Who is Christopher L. Baugh?
Christopher Lee Baugh is a registered investment advisor and former stockbroker who operated under multiple business names including Wealth Stewards, Wealth Wise West, and Baugh Financial. After his departure from Raymond James Financial Services, he joined NewEdge Advisors, LLC as a registered investment advisor, where he currently operates from Miramar, Florida.
Baugh’s professional background includes previous employment at:
- A.G. Edwards & Sons, Inc.
- Raymond James Financial Services, Inc. (until 2024 termination)
- NewEdge Advisors, LLC (current)
His CRD record shows a concerning pattern of regulatory issues, unauthorized activities, and employment termination that should concern any investor protection advocate who worked with him during his time at Raymond James.
Arkansas Securities Department Sanctions: The Rabbi Trust Violation
In August 2024, the Arkansas Securities Department took formal regulatory action against Christopher Baugh for engaging in unauthorized outside business activities. The specific allegations included:
- Receiving Undisclosed Compensation: Baugh allegedly received over $10,000 in direct payments from clients for establishing “Rabbi Trust” plans
- Failure to Obtain Firm Approval: These activities were conducted without proper notification to or approval from Raymond James Financial Services
- Violation of Industry Standards: The actions violated both state securities regulations and FINRA rules governing outside business activities
As part of the settlement agreement, Baugh was placed under heightened supervisory requirements that will remain in effect until August 19, 2027. This extended supervision period indicates the seriousness of the violations and the ongoing concerns about his business practices.
Understanding Rabbi Trust Violations
Rabbi Trusts are specialized executive compensation arrangements typically used by corporations to provide deferred compensation benefits. When a financial advisor engages in unauthorized Rabbi Trust activities, several red flags emerge:
- Receiving payments directly from clients outside the normal brokerage relationship
- Bypassing firm compliance and supervision systems
- Potential conflicts of interest in compensation structure
- Risk of inadequate disclosure to clients about fees and arrangements
- Possible violations of fiduciary duties
For clients who paid Baugh for Rabbi Trust services, questions arise about whether they received proper value, appropriate disclosures, and suitable advice for their specific financial situations.
Raymond James Termination: “Conduct Inconsistent with Firm Policies”
Following the Arkansas regulatory action, Raymond James Financial Services discharged Christopher Baugh in 2024. The firm cited “conduct inconsistent with firm policies” as the reason for termination. This type of employment termination often indicates serious violations of internal compliance procedures and professional standards.
The timing of the termination – coming after the regulatory sanctions – suggests that Raymond James viewed Baugh’s conduct as incompatible with their risk management and compliance standards. For investors, this raises important questions about whether the firm provided adequate supervision and whether they should have detected Baugh’s unauthorized activities sooner.
FINRA Rule Violations at Issue
Baugh’s alleged conduct appears to violate several key FINRA rules that govern broker behavior:
FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade)
- Requires brokers to observe high standards of commercial honor
- Prohibits conduct inconsistent with just and equitable principles of trade
FINRA Rule 3270 (Outside Business Activities)
- Requires written notice to firms about outside business activities
- Mandates disclosure of compensation received from such activities
- Ensures proper supervision of all broker activities
These violations are particularly concerning because they involve:
- Failure to disclose material business relationships to the employing firm
- Receiving compensation outside normal brokerage channels
- Operating without proper supervisory oversight
- Potential conflicts of interest with client relationships
Red Flags for Investors Who Worked with Baugh
Clients who worked with Christopher Baugh should watch for these warning signs of potential misconduct:
- Requests for direct payments outside the normal brokerage relationship
- Offers to provide services beyond typical investment advice (such as Rabbi Trusts)
- Reluctance to provide written documentation about fee arrangements
- Emphasis on complex financial structures without clear explanations
- Promises of exclusive or special investment opportunities
- Pressure to engage in transactions without firm involvement
- Minimal disclosure about conflicts of interest or compensation arrangements
If you experienced any of these situations while working with Baugh, your investment relationship may have involved unauthorized activities that could form the basis for a recovery claim.
Impact on Client Portfolios and Trust Relationships
When brokers engage in unauthorized outside business activities, clients often suffer in multiple ways:
Financial Losses: Clients may pay for services that are overpriced, unsuitable, or inadequately performed
Broken Trust: The foundation of the advisor-client relationship is compromised when advisors operate outside proper channels
Regulatory Risk: Clients may unknowingly participate in arrangements that lack proper regulatory oversight
Opportunity Cost: Time and money spent on unauthorized arrangements could have been invested more appropriately
For Baugh’s clients, particularly those who paid for Rabbi Trust services, these concerns are especially relevant given the regulatory findings against him.
Heightened Supervision Requirements
The Arkansas Securities Department’s requirement that Baugh operate under heightened supervision until 2027 reflects the ongoing concerns about his business practices. This supervision typically includes:
- Enhanced review of all client communications
- Pre-approval requirements for certain activities
- Regular compliance monitoring and reporting
- Restricted authority for independent decision-making
While this supervision applies to his current role at NewEdge Advisors, it serves as a warning about his past conduct and the ongoing regulatory concerns about his ability to operate independently.
Legal Options for Recovery Through FINRA Arbitration
Investors who suffered losses while working with Christopher Baugh may be able to recover damages through FINRA arbitration. This process offers several advantages:
- Industry Expertise: Arbitrators understand securities law and industry practices
- Faster Resolution: Claims typically resolve within 12-16 months
- Cost Efficiency: Less expensive than traditional court litigation
- Privacy: Proceedings are confidential
- Binding Awards: Decisions are enforceable and difficult to appeal
Potential claims against Baugh and potentially Raymond James Financial Services could include:
- Breach of fiduciary duty
- Unauthorized investment activities
- Failure to disclose material conflicts of interest
- Failure to supervise (against the firm)
- Fraud and misrepresentation
- Breach of contract
Statute of Limitations Considerations
FINRA arbitration claims generally must be filed within six years of the events giving rise to the dispute. However, various factors can affect these time limits:
- Discovery of the misconduct may start the clock later
- Fraudulent concealment can extend time limits
- Continuing violations may reset limitation periods
- State law variations may apply
Given that Baugh’s violations were only recently disclosed through regulatory action, some clients may have grounds to pursue claims even for older transactions. However, prompt action is essential to preserve all legal rights.
Firm Liability: Raymond James Supervision Failures
Raymond James Financial Services may bear responsibility for Baugh’s unauthorized activities under the legal doctrine of supervisory liability. Brokerage firms have obligations to:
- Implement Reasonable Supervision Systems: Firms must have procedures to detect unauthorized outside activities
- Monitor Broker Conduct: Regular review of broker activities and client relationships
- Investigate Red Flags: Follow up on unusual patterns or client complaints
- Enforce Compliance: Take action when violations are detected
Questions about Raymond James’s supervision of Baugh include:
- How long did the unauthorized Rabbi Trust activities continue?
- Were there warning signs the firm should have detected?
- Did client complaints raise red flags about Baugh’s conduct?
- What compliance procedures were in place to prevent such violations?
These supervisory failures could make Raymond James liable for client losses, even after Baugh’s termination.
Protecting Yourself from Investment Fraud
To avoid similar situations with other financial advisors, consider these protective measures:
- Research Your Advisor: Use FINRA BrokerCheck to review any financial professional’s background
- Understand Fee Structures: Always know how your advisor is compensated
- Question Complex Arrangements: Be skeptical of unusual financial structures or direct payment requests
- Verify Firm Approval: Ensure all recommended services are properly authorized by the advisor’s firm
- Get Everything in Writing: Document all fee arrangements and services provided
- Stay Informed: Regularly review account statements and ask questions about any unclear charges
Next Steps for Affected Investors
If you invested with Christopher Baugh or paid for Rabbi Trust services while he was at Raymond James, consider these steps:
- Gather Documentation: Collect all account statements, correspondence, and fee agreements
- Request Your Client File: You have the right to obtain your complete client file from Raymond James
- Document Your Experience: Write down your recollections of conversations and representations made
- Calculate Your Losses: Determine financial damages from unauthorized activities or poor performance
- Consult an Attorney: Speak with an experienced securities attorney about your potential claims
Time is critical in investment fraud cases. The combination of Baugh’s regulatory sanctions, firm termination, and ongoing supervision requirements suggests serious misconduct that may entitle affected investors to recovery.
Similar Cases and Patterns
The Baugh case is part of a broader pattern of broker misconduct involving unauthorized outside business activities. Our firm has investigated similar cases including Investigating Anthony Mampieri For Investment Misconduct and Investigating J. Craig McIlroy For Investment Fraud, where brokers engaged in activities outside their firm’s knowledge and approval.
These cases demonstrate the importance of proper broker supervision and the need for investors to remain vigilant about unauthorized activities that may put their investments at risk.
Seeking Justice and Recovery
The regulatory action against Christopher Baugh and his subsequent termination from Raymond James Financial Services reveal a troubling pattern of unauthorized activities and regulatory violations. For investors who trusted Baugh with their financial futures, these revelations may provide grounds for significant recovery through FINRA arbitration.
The unauthorized Rabbi Trust activities, failure to obtain firm approval, and subsequent heightened supervision requirements all point to serious breaches of industry standards and fiduciary duties. Combined with potential supervisory failures by Raymond James, affected investors may have multiple avenues for recovery.
Investment fraud and unauthorized broker activities can devastate individual investors and their families. However, the securities industry’s arbitration system provides a pathway for justice and financial recovery. With proper legal representation, investors who suffered losses due to Baugh’s misconduct may be able to recover substantial damages.
Call 800-950-6553 or complete our online form to schedule your no-obligation case evaluation.
Don’t let broker misconduct cost you your financial future. Contact our experienced team today to discuss your potential claims against Christopher L. Baugh and Raymond James Financial Services.
