March, 2025 | Based in Red Bank, NJ
If you’ve invested with Shawn Michael Weadock and experienced concerning practices, don’t hesitate to reach out today. Call 800-950-6553 or complete our online form to schedule your no-obligation case evaluation. Time-sensitive legal options may be available to recover your losses.
Essential Information About Shawn Michael Weadock
- Full Name: Shawn Michael Weadock
- CRD Number: 2602704
- Current Location: Red Bank, NJ
- Current Employer: Alexander Capital, L.P.
- Office Address: 10 DRS James Parker Blvd, Suite 202, Red Bank, NJ 07701
- Registration Status: Currently registered with 1 Self-Regulatory Organization (FINRA) and licensed in 10 U.S. states and territories
- State Licenses: California, Delaware, Florida, Maryland, Michigan, New Jersey, New York, Pennsylvania, Vermont, Washington
- Experience: In the securities industry since June 1995 (nearly 30 years)
- FINRA BrokerCheck: One pending customer dispute alleging breach of fiduciary duty, fraudulent inducement, negligence, breach of contract, and violation of FINRA Rule 2010
- Previous Employers: National Securities Corporation, Burnham Securities Inc., Rafferty Capital Markets, LLC, and others
- Ability to Recover Losses: Investors may be eligible for FINRA arbitration to recover losses
Recent FINRA Arbitration Claims Against Shawn Michael Weadock
Shawn Michael Weadock is currently facing a serious customer dispute that deserves close scrutiny by investors who have worked with him. Filed in October 2024, the pending FINRA arbitration (Case #24-02230) contains allegations of breach of fiduciary duty, fraudulent inducement, negligence, breach of contract, and violations of FINRA Rule 2010 related to private equity investments. The claimants are seeking damages of $1,694,000.
While Mr. Weadock has denied the allegations, claiming he “was not the broker for any of the transactions at issue,” this case raises significant red flags that merit investigation. His defense that “claimants’ allegations are directly contradicted by their written affirmations and the market performance of the investments” will be tested through the FINRA arbitration process.
Background and Professional History
Shawn Michael Weadock has been in the securities industry since 1995, having passed multiple securities exams including the General Securities Principal Examination (Series 24), Securities Industry Essentials Examination (SIE), Limited Representative-Equity Trader Exam (Series 55), General Securities Representative Examination (Series 7), and the Uniform Securities Agent State Law Examination (Series 63).
Since July 2016, Weadock has been affiliated with Alexander Capital, L.P., where he serves as a registered representative. Prior to this position, he worked at several other firms, including:
- National Securities Corporation (January 2016 – July 2016)
- Burnham Securities Inc. (November 2014 – August 2015)
- Rafferty Capital Markets, LLC (August 2010 – September 2014)
- Labranche Financial Services, LLC (April 2007 – August 2010)
- Jefferies & Company, Inc. (September 2003 – March 2007)
- Wien Securities Corp. (January 2003 – September 2003)
- H. Meyerson & Co., Inc. (November 2002 – January 2003)
- Herzog, Heine, Geduld, LLC (October 1995 – October 2002)
- Barron Chase Securities, Inc. (June 1995 – September 1995)
This pattern of employment at multiple brokerage firms over a relatively short period (9 firms in 21 years before his current position) may be considered a potential warning sign in the industry. Frequent moves between firms sometimes indicate underlying issues, including customer complaints or regulatory concerns.
Alexander Capital’s Regulatory History and Culture
While our investigation focuses primarily on Shawn Michael Weadock, it’s essential to understand the regulatory environment at his current firm, Alexander Capital, L.P. (CRD# 40077). Brokerage firms have a legal obligation to supervise their financial advisors and ensure compliance with securities regulations.
According to publicly available records, Alexander Capital has faced its own regulatory challenges over the years. Firms with a history of regulatory issues may foster a culture that tolerates misconduct or fails to establish adequate supervisory procedures, potentially enabling advisors to engage in problematic practices.
Our investigation examines whether Alexander Capital maintained appropriate supervision of Weadock’s activities, particularly concerning the private equity investments that are now subject to the pending FINRA arbitration.
Understanding Private Equity Investments and Associated Risks
The pending customer dispute against Weadock specifically mentions private equity investments. These investments differ significantly from publicly traded securities and come with unique risks that investors should understand:
- Limited Liquidity: Private equity investments typically lock up capital for extended periods, often 7-10 years or more. Unlike stocks or bonds, investors cannot easily sell their positions if they need access to their funds.
- Limited Transparency: Private equity investments don’t have the same disclosure requirements as publicly traded securities. Investors may receive less information about the underlying assets and performance.
- Complex Fee Structures: These investments often involve multiple layers of fees, including management fees, performance fees, and carried interest, which can significantly impact returns.
- Higher Risk Profile: Private equity typically involves investments in less established companies or turnaround situations, which carries higher risk than more conservative investment options.
- Suitability Concerns: Given these characteristics, private equity investments are not suitable for all investors. Financial advisors have a duty to recommend only those investments that align with a client’s financial situation, investment objectives, risk tolerance, and liquidity needs.
The substantial damages sought in the arbitration against Weadock ($1,694,000) suggest potential serious violations related to the recommendation or management of these private equity investments.
Common Misconduct in Private Equity Recommendations
Our investigation into Weadock’s investment recommendations examines several potential forms of misconduct that commonly occur in the context of private equity investments:
Fraudulent Inducement
As alleged in the pending arbitration, fraudulent inducement involves making false or misleading statements to persuade an investor to purchase a security. This might include:
- Misrepresenting the risk level of the private equity investment
- Providing unrealistic projections of potential returns
- Failing to disclose material facts about the investment
- Making false claims about the investment’s track record or management
Breach of Fiduciary Duty
Financial advisors who function as fiduciaries must put their clients’ interests ahead of their own. Potential breaches in the context of private equity recommendations might include:
- Recommending investments that generate high commissions but are unsuitable for the client
- Failing to disclose conflicts of interest
- Not conducting adequate due diligence on the recommended investments
- Prioritizing firm interests over client interests
Negligence
Negligence claims typically involve a financial advisor’s failure to exercise the degree of care that a reasonably prudent advisor would exercise under similar circumstances. This might include:
- Inadequate research or due diligence on recommended private equity investments
- Failure to monitor investments appropriately
- Lack of reasonable basis for investment recommendations
- Insufficient understanding of the complex products being recommended
Violation of FINRA Rule 2010
FINRA Rule 2010 requires member firms and associated persons to “observe high standards of commercial honor and just and equitable principles of trade.” Violations related to private equity recommendations might include:
- Misrepresenting material facts about an investment
- Omitting key risk disclosures
- Engaging in deceptive practices
- Making unsuitable recommendations
Red Flags for Investors
Based on our investigation into Weadock’s practices and the pending arbitration, investors should be aware of several red flags that may indicate potential misconduct:
- Pressure to Invest Quickly: Advisors pushing clients to make rapid decisions about private equity investments, often citing “limited availability” or “closing windows.”
- Guaranteed Returns: Any promise of “guaranteed” outcomes in private equity investments should be treated with extreme skepticism, as these investments are inherently risky.
- Lack of Documentation: Inadequate or confusing disclosure documents, or resistance to providing written information about the investment.
- Concentration Recommendations: Suggestions to place a disproportionate amount of assets in private equity investments, potentially undermining portfolio diversification.
- Minimized Risk Discussions: Downplaying the risks associated with private equity investments while emphasizing potential returns.
- Reluctance to Discuss Fees: Avoiding clear explanations of the fee structure, which can be particularly complex in private equity investments.
- Outside Business Activities: Financial advisors sometimes sell private investments through outside business entities to evade their firm’s supervision. Weadock’s BrokerCheck report lists several outside business activities, including Value Hunter LLC and Alexander Capital Ventures.
Legal and Regulatory Framework
Financial advisors like Shawn Michael Weadock are subject to numerous regulations designed to protect investors. Understanding these rules can help investors recognize potential violations:
FINRA Rules
- Rule 2010: Requires adherence to high standards of commercial honor and just and equitable principles of trade.
- Rule 2111: The suitability rule, which requires that advisors have a reasonable basis to believe their recommendations are suitable for the client.
- Rule 2020: Prohibits manipulative and deceptive practices.
- Rule 3110: Requires firms to establish and maintain a supervisory system designed to achieve compliance with securities laws and regulations.
SEC Regulations
- Regulation Best Interest (Reg BI): Requires broker-dealers to act in the best interest of retail customers when making recommendations.
- Investment Advisers Act of 1940: Imposes fiduciary duties on investment advisers.
Common Law Duties
- Fiduciary Duty: In certain circumstances, financial advisors may owe fiduciary duties to their clients, requiring them to act with the utmost good faith and loyalty.
- Duty of Care: Advisors must exercise reasonable care, skill, and diligence in providing investment advice.
Violations of these rules and duties may form the basis for investor claims seeking recovery of investment losses.
Options for Affected Investors
If you’ve invested with Shawn Michael Weadock and believe you may have been subject to misconduct, several avenues for recovery exist:
FINRA Arbitration
Most investor disputes are resolved through FINRA’s arbitration process rather than in court. This is typically due to the pre-dispute arbitration agreements contained in most brokerage account agreements.
FINRA arbitration offers several advantages:
- Generally faster than court litigation
- Often less expensive than court proceedings
- Decided by arbitrators with securities industry knowledge
- Less formal than court proceedings
- Binding decisions
Statute of Limitations
Investors should be aware of time limitations for filing claims:
- FINRA arbitration claims generally must be filed within six years of the event giving rise to the claim
- State statutes of limitations may also apply
- The eligibility period may be shorter for certain types of claims
Potential Recovery
Successful claims may result in various forms of relief:
- Compensatory damages (direct financial losses)
- Interest on lost funds
- Costs and fees associated with the arbitration
- In egregious cases, punitive damages may be available
Steps to Protect Your Investments
If you’ve worked with Shawn Michael Weadock or similar financial advisors, consider taking these protective steps:
- Review Your Account Statements: Examine all statements for unauthorized transactions, unusual activity, or investments you don’t recognize.
- Request Documentation: Obtain copies of all account opening documents, investment recommendations, and disclosures.
- Verify Registrations: Use FINRA BrokerCheck to verify your advisor’s registration status and review any disclosed complaints or regulatory actions.
- Document Communications: Keep records of all communications with your financial advisor, including emails, letters, and notes from meetings or phone calls.
- Consult With an Investment Fraud Attorney: If you suspect misconduct, speak with an attorney who specializes in securities law and FINRA arbitration.
How Our Investment Fraud Attorneys Can Help
Our law firm specializes in representing investors who have suffered losses due to financial advisor misconduct. If you’ve invested with Shawn Michael Weadock and experienced concerns, we offer:
- Free Case Evaluation: We’ll review your investment history and documentation at no cost to determine if you may have a claim.
- Forensic Account Analysis: Our experts will analyze your account statements to identify potential misconduct, unsuitable recommendations, or excessive trading.
- FINRA Arbitration Representation: If we identify actionable misconduct, we can represent you through the entire FINRA arbitration process.
- Contingency Fee Structure: We work on a contingency fee basis, meaning you pay nothing unless we recover money for you.
- Experience With Complex Investments: Our attorneys have specific expertise in cases involving private equity and other complex investment products.
Don’t wait to explore your options if you suspect misconduct. Protecting your financial future starts with understanding your rights and taking action. Whether you’re looking to recover losses or simply want to better understand if your investments were handled appropriately, we can help guide you through the process.
Your financial security matters, and advisors who violate industry standards should be held accountable. Take the first step by reaching out today— Call 800-950-6553 or complete our confidential online form to discuss your situation with our experienced investment fraud attorneys. The consultation is free, and there’s no obligation to proceed.
