March, 2025 | Based in Albuquerque, NM
Have you suffered financial losses while working with Pamela Sue Espinosa? Take action today to protect your rights and explore recovery options. Call 800-950-6553 or complete our online form to schedule your confidential, no-obligation case evaluation.
Essential Information About Pamela Sue Espinosa
- Full Name: Pamela Sue Espinosa
- CRD Number: 5865661
- Current Location: Albuquerque, NM
- Current Employers:
- Kestra Advisory Services, LLC (Investment Advisor Representative)
- Kestra Investment Services, LLC (Registered Representative)
- Davis Advisory Group (Life and Health Insurance Agent)
- Office Address: 100 Sun Avenue NE, Suite 600, Albuquerque, NM 87109
- Registration Status: Currently registered with 1 Self-Regulatory Organization and in 20 U.S. states/territories
- State Licenses: Arizona, California, Colorado, District of Columbia, Idaho, Illinois, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, South Carolina, Texas, Utah, Virginia, Washington, Wyoming
- Experience: In the securities industry since 2011
- FINRA BrokerCheck: Shows 1 criminal disclosure and 1 customer dispute
- Previous Employers: SII Investments, Inc. (04/2011 – 11/2017)
- Ability to Recover Losses: May be subject to FINRA arbitration claims
The Investigation Into Pamela Sue Espinosa’s Investment Practices
Pamela Sue Espinosa, a financial advisor currently registered with Kestra Investment Services and Kestra Advisory Services in Albuquerque, New Mexico, is under investigation for alleged investment fraud and misconduct. Our investigation focuses on serious concerns regarding her investment recommendations, sales practices, and troubling background history that raises red flags for investors.
Espinosa entered the securities industry in 2011, obtaining her Series 7 General Securities Representative license and Series 66 Uniform Combined State Law Examination qualification. She currently operates through Davis Advisory Group, LLC, serving as both a registered representative for securities transactions and as an investment advisor representative offering financial planning and fee-based managed accounts.
While Espinosa maintains active licenses across 20 states and territories, her regulatory record reveals concerning issues that require scrutiny. For investors who have entrusted their financial futures to Espinosa, these revelations demand immediate attention.
Concerning Criminal History: A Felony Embezzlement Conviction
One of the most alarming revelations in Espinosa’s background is a disclosed criminal event. According to FINRA BrokerCheck records, Espinosa was charged with felony embezzlement in 1993 in the Second Judicial District Court in Bernalillo County, New Mexico (Case #93-01093). She pleaded guilty to this charge, a serious financial crime directly related to trustworthiness with financial matters.
Though she received a deferred sentence with five years of probation and ultimately received an order of dismissal in 1996 after completing probation, this criminal history raises significant concerns about her suitability to manage other people’s investments. A felony embezzlement conviction reflects a fundamental breach of financial trust that investors should be aware of when considering whether to work with Espinosa.
The financial industry typically maintains stringent standards regarding the character and fitness of those permitted to handle client funds. That Espinosa was subsequently able to obtain securities licenses despite this criminal history raises questions about what disclosures were made during the registration process and what supervision has been in place since she entered the industry.
Recent Customer Dispute: Allegations of Unsuitable Private Investments
In January 2023, a customer initiated a FINRA arbitration claim (Case #22-02866) against Espinosa alleging that she recommended unsuitable private investments to generate high commissions. The claim also alleged that Espinosa engaged in cross trading, a practice that can create conflicts of interest and potential harm to investors.
The arbitration claim sought $1,000,000 in damages, indicating the significant scale of the alleged misconduct. While the case was ultimately settled for $200,000 in October 2024, the substantial settlement amount suggests the claims had merit. Notably, according to the BrokerCheck report, Espinosa did not personally contribute to the settlement, which was likely paid by her firm.
In her broker statement, Espinosa “expressly denies all allegations of the claim,” stating they “were settled without admission of wrongdoing or liability.” However, firms typically conduct thorough investigations before agreeing to substantial settlements, and a $200,000 payment to resolve customer complaints is significant.
Private Placement Investments and Direct Participation Programs
The customer complaint against Espinosa specifically identified Direct Investment-DPP (Direct Participation Program) & LP (Limited Partnership) Interests as the investment products at issue. These types of private placement investments often involve:
- High commission structures: These products typically pay brokers significantly higher commissions than traditional investments like mutual funds or exchange-traded securities, creating potential conflicts of interest.
- Limited liquidity: Investors often cannot sell these investments when needed, as they typically lack secondary markets.
- Minimal regulatory oversight: Private placements are subject to less regulatory scrutiny than publicly traded securities.
- Complex structures: These investments frequently involve complicated fee arrangements and ownership structures that many investors struggle to understand.
- Heightened risk: Many private placements are speculative in nature and carry significantly higher risk of loss than traditional investments.
The allegations that Espinosa recommended these products to generate high commissions rather than to serve clients’ best interests represent a potential breach of fiduciary duty and securities regulations.
Cross-Trading Concerns
The additional allegation of “cross trading” in the customer complaint introduces another serious concern. Cross trading occurs when an investment advisor or broker arranges trades between different client accounts rather than executing them in the open market. While not inherently illegal, cross trading creates several potential issues:
- Conflicts of interest: The advisor may favor one client over another in the pricing or allocation of securities.
- Price manipulation: Without market forces determining pricing, the broker has discretion that could disadvantage certain clients.
- Lack of transparency: Cross trades often lack the transparency of market-executed transactions.
- Regulatory scrutiny: Such practices receive heightened scrutiny from regulators due to the inherent risks they pose to investors.
If Espinosa engaged in cross trading, particularly without proper disclosures, approvals, and fair pricing mechanisms, it could constitute a serious violation of securities regulations and fiduciary duties.
Red Flags for Investors
The combination of Espinosa’s criminal history involving financial dishonesty and the recent substantial customer complaint settlement raises several red flags that current and prospective clients should consider:
1. Undisclosed Conflicts of Interest
The allegation that Espinosa recommended unsuitable investments to generate high commissions suggests she may have prioritized her own financial interests over those of her clients. This represents a fundamental conflict of interest that, if true, would violate the basic duties owed to investors.
2. Suitability Concerns
Financial advisors are required to recommend only investments that are suitable for each specific client’s financial situation, objectives, risk tolerance, and needs. The complaint alleging unsuitable private investments indicates potential disregard for this core obligation.
3. Pattern of Questionable Judgment
The progression from a felony embezzlement conviction to allegations of unsuitable investment recommendations and cross trading may indicate a pattern of questionable judgment in financial matters that spans decades.
4. Limited Experience with a Significant History
Espinosa entered the securities industry in 2011, meaning she has approximately 14 years of experience. Having a major customer complaint resulting in a substantial settlement, along with a criminal history, in that relatively short career span is concerning.
5. Multiple Business Activities
Espinosa reports significant involvement in multiple business activities, including her role with Davis Advisory Group and as both a registered representative and investment advisor representative. This division of time and potential conflicts between different compensation structures (commissions vs. advisory fees) may compromise the quality of advice provided.
Legal and Regulatory Framework
Financial advisors like Pamela Sue Espinosa are subject to various regulations designed to protect investors:
FINRA Rules
- Rule 2111 (Suitability): Requires brokers to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer based on their investment profile.
- Rule 2010: Requires brokers to observe high standards of commercial honor and just and equitable principles of trade.
- Rule 3270 (Outside Business Activities): Requires registered persons to provide written notice to their firm before engaging in any outside business activity.
- Rule 5310 (Best Execution): Requires brokers to use reasonable diligence to ascertain the best market for a security and buy or sell in such market so that the price to the customer is as favorable as possible under prevailing market conditions.
Investment Advisers Act of 1940
As an investment adviser representative, Espinosa is also subject to fiduciary duties under the Investment Advisers Act of 1940, which include:
- The duty to act in the client’s best interest
- The duty to disclose all material facts, including conflicts of interest
- The duty to provide suitable advice
- The duty of loyalty and good faith
State Securities Laws
Registered in 20 states and territories, Espinosa must also comply with the specific securities laws and regulations of each jurisdiction, which often impose additional requirements beyond federal and FINRA regulations.
Guidance for Investors Who Worked with Pamela Sue Espinosa
If you are or were a client of Pamela Sue Espinosa and are concerned about your investments, consider taking the following steps:
1. Review Your Investment Portfolio
Carefully examine all investment recommendations made by Espinosa, with particular attention to:
- Private placements or Direct Participation Programs (DPPs)
- Limited partnerships or other illiquid investments
- Investments with high fee structures or commission rates
- Any investments that have performed poorly or differently than represented
2. Request and Review Your Account Documentation
Gather and organize all documentation related to your account, including:
- Account statements
- Confirmations of transactions
- Investment prospectuses and offering documents
- Communications with Espinosa or her firms
- Financial plans or investment strategies provided
- Risk tolerance questionnaires or suitability assessments
3. Assess the Suitability of Recommended Investments
Consider whether the investments recommended by Espinosa were appropriate for your:
- Financial situation and goals
- Investment experience and knowledge
- Risk tolerance
- Time horizon
- Liquidity needs
- Tax situation
4. Watch for Signs of Potential Misconduct
Be alert to potential indicators of misconduct, such as:
- Recommendations heavily concentrated in high-commission products
- Pressure to invest quickly without adequate explanation
- Promises of guaranteed returns or minimal risk
- Missing account statements or discrepancies in reporting
- Unauthorized trading or transactions you don’t recall approving
- Significant losses that seem inconsistent with market conditions
5. Understand the Statute of Limitations
Be aware that time limitations apply to investment-related claims:
- FINRA arbitration claims generally must be filed within six years of the event giving rise to the claim
- State statutes of limitations may provide different deadlines
- Delaying action could forfeit your right to recover losses
How Our Law Firm Can Help Recover Investment Losses
Our firm specializes in representing investors who have suffered losses due to broker misconduct, unsuitable investment recommendations, and other forms of securities fraud. If you’ve worked with Pamela Sue Espinosa and believe you may have been harmed, we offer several vital services:
Comprehensive Case Evaluation
We provide a thorough, no-cost initial consultation to assess your potential claims. Our attorneys will review your investment history, account statements, and communications to identify potential violations of securities laws and regulations.
Expert Analysis of Complex Investments
Our team includes financial experts who can analyze private placements, DPPs, limited partnerships, and other complex investment vehicles to determine if they were suitable for your investment profile and properly represented to you.
FINRA Arbitration Representation
Most disputes with brokers and brokerage firms are resolved through FINRA arbitration rather than court litigation. Our attorneys have extensive experience representing investors in FINRA proceedings and can guide you through this specialized process.
Contingency Fee Structure
We handle investment fraud cases on a contingency fee basis, meaning you pay no legal fees unless we recover money for you. This aligns our interests with yours and makes quality legal representation accessible regardless of your current financial situation.
Strategic Recovery Approach
Depending on your specific situation, we can pursue various strategies to maximize your recovery, including:
- FINRA arbitration claims against both the broker and their firms
- Direct negotiations with brokerage firms
- Coordination with regulatory investigations
- Pursuit of claims against multiple parties when appropriate
Don’t wait to take action if you’ve experienced losses while working with Pamela Sue Espinosa. Call 800-950-6553 today or submit our online contact form to arrange your free, confidential consultation with our experienced investment fraud attorneys.
