ROBERT T LI Investment Fraud Investigation

March, 2025 | Based in Naperville, IL

Need assistance with your investments handled by Robert T. Li? You don’t have to navigate these complex waters alone. Call 800-950-6553 or fill out our online form to schedule your no-obligation case evaluation with experienced securities fraud attorneys today.

Critical Information About Robert T. Li

• Full Name: Robert T. Li
• CRD Number: 4068255
• Current Location: Naperville, IL
• Current Registration Status: Currently registered with LPL Financial LLC (since 08/05/2003)
• State Licenses: Registered in 11 U.S. states and territories
• Disclosure Events: 3 Customer Disputes (2 settled, 1 closed without action)
• FINRA BrokerCheck: Recent settlements totaling $140,000
• Outside Business Activities: RL Wealth Management Group, Ltd. and real estate rental properties
• Ability to Recover Losses: Potential through FINRA arbitration

Troubling Pattern of Unsuitable Investment Recommendations

Robert T. Li, a financial advisor currently operating in Naperville, Illinois through LPL Financial LLC, has recently been the subject of multiple customer complaints alleging unsuitable investment recommendations. According to his FINRA BrokerCheck report, Li has been involved in three customer disputes throughout his career, with two recent cases resulting in significant settlements totaling $140,000.

The most concerning aspect of these complaints involves allegations that Li recommended investment strategies that were unsuitable for his clients’ financial objectives and risk tolerance. Specifically, two separate clients filed FINRA arbitration claims in December 2022, alleging that Li recommended inappropriate investments in Real Estate Investment Trusts (REITs) and the use of margin trading for equities purchases.

Recent FINRA Arbitration Claims and Settlements

The first arbitration claim (FINRA Case #22-02910) was filed on December 20, 2022, alleging that Li recommended an investment strategy involving REITs and buying certain equities on margin that was not suitable for the customer’s investment objectives and risk tolerance. This complaint covered activities spanning from December 2008 to January 2023, a period of more than 14 years, suggesting a potentially long-term pattern of unsuitable recommendations. The customer sought damages of $200,000, and the case was ultimately settled in July 2023 for $100,000.

The second arbitration claim (FINRA Case #22-02909), also filed on December 20, 2022, alleged similar misconduct—that Li recommended buying certain equities on margin, which was unsuitable for the customer’s investment objectives and risk tolerance. This complaint covered activities from November 2020 to January 2023. The customer sought damages of $75,000, and this case was also settled in July 2023 for $40,000.

While Li has denied any wrongdoing in both cases, stating that the allegations were “completely without merit,” the fact that LPL Financial chose to settle both claims for substantial amounts suggests that the firm recognized potential liability. It is common in the securities industry for brokerage firms to settle claims they believe could result in larger judgments if brought before arbitrators, or to avoid the costs and negative publicity associated with prolonged arbitration proceedings.

Understanding Unsuitable Investment Recommendations

At the heart of these complaints lies one of the most fundamental obligations in the financial industry: the suitability requirement. Financial advisors like Robert T. Li are required under FINRA Rule 2111 to have a reasonable basis for believing that their recommendations are suitable for their clients based on the client’s:

1. Investment profile: Including age, financial situation, tax status, investment objectives, risk tolerance, and other factors
2. Investment experience: The client’s understanding of financial markets and investment products
3. Time horizon: How long the client intends to hold the investments
4. Liquidity needs: The client’s need for access to invested funds

The specific investments mentioned in the complaints—REITs and margin trading—carry distinct risks that may be unsuitable for many retail investors:

Real Estate Investment Trusts (REITs)

REITs are companies that own, operate, or finance income-producing real estate across various property sectors. While they can provide income through dividends, REITs often come with significant risks:

• Liquidity issues: Many non-traded REITs have limited liquidity options, making it difficult for investors to sell their shares if needed.
• High fees: REITs may charge substantial upfront fees that reduce the actual amount invested.
• Market risk: REITs are subject to real estate market fluctuations and economic downturns.
• Income variability: Dividend payments are not guaranteed and can fluctuate or be cut entirely based on the REIT’s performance.

Margin Trading

Margin trading involves borrowing funds from a brokerage firm to purchase securities. This strategy can amplify both gains and losses:

• Amplified losses: Losses are magnified in down markets, potentially exceeding the original investment.
• Margin calls: If investments decline in value, investors may be required to deposit additional funds or sell securities at unfavorable prices.
• Interest costs: Margin loans accrue interest, creating ongoing costs that eat into investment returns.
• Increased complexity: Margin trading introduces additional complexity that many retail investors may not fully understand.

For many conservative or moderate investors, especially those nearing or in retirement, these investment strategies may present unacceptable levels of risk.

Li’s Professional Background and Career

Robert T. Li has been in the securities industry since December 1999, when he obtained his Series 7 (General Securities Representative) license. He also holds a Series 65 (Uniform Investment Adviser Law) license and a Series 63 (Uniform Securities Agent State Law) license. These qualifications allow him to work as both a broker and an investment adviser representative.

Li’s employment history shows a relatively stable career, having been with LPL Financial LLC since August 2003—a tenure of over 21 years with the same firm. Prior to joining LPL, he spent a brief period (July-August 2003) at Wachovia Securities, LLC, and before that, he worked at Prudential Securities Incorporated from December 1999 to July 2003.

Currently, Li is registered in 11 U.S. states and territories, primarily in the Midwest and East Coast, including California, Colorado, Florida, Illinois, Indiana, Massachusetts, New York, Pennsylvania, Rhode Island, Texas, and Virginia. He operates from an LPL Financial branch located in Naperville, Illinois.

Outside Business Activities

Li’s FINRA record discloses several outside business activities that investors should be aware of. Since April 2009, he has been affiliated with RL Wealth Management Group, Ltd., which is listed as investment-related and located at his reported business location. The exact nature and services of this entity are not detailed in the BrokerCheck report.

Additionally, Li is involved in at least two investment-related real estate rental ventures:

1. A property in Lombard, IL, which he began managing in March 2013
2. A property in Bolingbrook, IL, which he began managing in February 2017, noted as his wife’s property

While registered representatives are permitted to engage in outside business activities with proper disclosure and firm approval, such activities can potentially create conflicts of interest if they compete for the advisor’s time and attention or if they create incentives to recommend certain investments over others.

Earlier Customer Complaint

In addition to the two recent settled arbitrations, Li’s record shows an earlier customer complaint from January 2002. This written complaint, filed by a customer’s attorney, alleged that Li invested in an “aggressive fund” when the customer had requested that her funds be transferred to a conservative fund. The customer sought damages of $49,500.

This complaint was ultimately closed without action in September 2003, reportedly due to “the failure of the customer’s attorney to pursue.” Li completely denied these allegations, stating they had “no merit.”

While this earlier complaint did not result in action, it shares thematic elements with the more recent complaints—allegations of recommending investments inconsistent with the customer’s stated risk tolerance and investment objectives.

Legal and Regulatory Framework

Financial advisors like Robert T. Li operate within a comprehensive regulatory framework designed to protect investors:

1. FINRA Rule 2111 (Suitability): Requires that brokers have a reasonable basis for believing a recommended transaction or investment strategy is suitable for the customer.
2. FINRA Rule 2090 (Know Your Customer): Requires brokers to use reasonable diligence to know the essential facts concerning every customer.
3. SEC Regulation Best Interest (Reg BI): Implemented in 2020, this rule requires broker-dealers to act in the best interest of retail customers when making recommendations.
4. Fiduciary Duty: Investment adviser representatives have a fiduciary duty to act in their clients’ best interests, disclose conflicts of interest, and provide full and fair disclosure of all material facts.
5. State Securities Laws: Additional regulations at the state level may apply depending on where the advisor operates.

Violations of these rules and regulations can lead to regulatory actions, customer complaints, arbitration proceedings, and potential financial liability for both the advisor and their employing firm.

Red Flags for Investors

The pattern of complaints against Robert T. Li highlights several red flags that investors should watch for in their own financial advisory relationships:

1. Mismatched Risk Profiles: Investments that seem more aggressive than your stated risk tolerance or financial objectives.
2. Margin Account Recommendations: Suggestions to use borrowed money (margin) to purchase securities, especially for conservative investors or those with limited risk capacity.
3. Concentration in Illiquid Investments: Excessive concentration in non-traded REITs or other investments that cannot be easily sold.
4. Unexpected Account Volatility: Significant fluctuations in account value that seem inconsistent with your understanding of the investments.
5. Pressure to Increase Risk: Persistent recommendations to take on more risk, especially when markets are performing well.
6. Unclear Fee Structures: Difficulty understanding exactly how your advisor is compensated for specific investment recommendations.
7. Limited Explanation of Risks: Inadequate disclosure or explanation of the potential downsides of recommended investments.

Legal Options for Affected Investors

If you have been a client of Robert T. Li and believe you may have been affected by unsuitable investment recommendations, several legal avenues are available to potentially recover losses:

1. FINRA Arbitration: Most investor disputes are resolved through FINRA’s arbitration process rather than court litigation. This is typically faster and less expensive than going to court. The two settled cases against Li were both handled through FINRA arbitration.
2. Claims Against the Brokerage Firm: Under the legal doctrine of “respondeat superior,” LPL Financial may be held liable for the actions of its registered representatives. Additionally, brokerage firms have a duty to supervise their representatives, and failure to properly supervise can be an independent basis for liability.
3. Mediation: FINRA also offers a mediation program that can help parties reach a voluntary, negotiated settlement of their dispute.
4. State Securities Regulators: Complaints can be filed with state securities regulators, who may investigate and take action against advisors who violate state securities laws.

It’s important to note that there are time limitations for filing claims. FINRA generally imposes a six-year eligibility period for arbitration claims, measured from the time the conduct giving rise to the claim occurred.

Protecting Yourself as an Investor

To protect yourself from potential investment fraud or unsuitable recommendations, consider these preventative measures:

1. Verify Advisor Credentials: Use FINRA’s BrokerCheck and the SEC’s Investment Adviser Public Disclosure website to research any financial professional before working with them.
2. Understand Your Investments: Never invest in products or strategies you don’t fully understand. Ask questions until you’re satisfied with the explanations.
3. Review Account Statements Carefully: Regularly check your account statements for unauthorized transactions or unexpected losses.
4. Document Everything: Keep records of all communications with your financial advisor, including recommendations, instructions, and concerns.
5. Be Wary of High-Pressure Sales Tactics: Good financial advice rarely requires immediate action. Take time to consider major investment decisions.
6. Know Your Risk Tolerance: Be clear about your investment objectives, time horizon, and risk tolerance, and ensure your portfolio reflects these parameters.
7. Diversify Properly: A well-diversified portfolio across asset classes can help manage risk.

How Our Investment Fraud Attorneys Can Help

If you’ve suffered losses while working with Robert T. Li, our experienced investment fraud attorneys can provide valuable assistance:

1. Case Evaluation: We offer a comprehensive, no-obligation evaluation of your investment losses to determine if you have a viable claim.
2. Documentation Analysis: Our attorneys will carefully review your account statements, investment recommendations, and other relevant documentation to identify potential misconduct.
3. Damages Assessment: We’ll help quantify the financial harm you’ve suffered, including not just direct losses but also opportunity costs and other damages.
4. Strategic Representation: With deep experience in FINRA arbitration proceedings, we can develop and implement an effective strategy to pursue recovery of your losses.
5. Expert Testimony: When necessary, we work with financial experts who can testify about industry standards and how your advisor’s recommendations deviated from acceptable practices.
6. Contingency Fee Arrangement: In most cases, we work on a contingency fee basis, meaning you pay nothing unless we recover money for you.

Don’t wait to explore your legal options. If you’ve experienced losses while working with Robert T. Li or believe you’ve been the victim of unsuitable investment recommendations, contact us today. Call 800-950-6553 or complete our online form to schedule your confidential, no-obligation consultation with our experienced securities fraud attorneys.

Chetan Patil

Chetan Patil is the founder and Managing Partner of the Patil Law. He brings over 15 years of extensive experience in diverse complex disputes and transactions, across the country. Mr. Patil specializes in litigations, trials, arbitrations, and appeals of complex securities, FINRA, financial and business disputes, with an emphasis in securities, financial services, and financial regulatory law.