SW Financial Broker Douglas Leone Sanctioned Again By Financial Watchdog

The Financial Industry Regulatory Authority (“FIRNA”) announced that it again sanctioned Salomon Whitney Financial securities broker Douglas A. Leone (CRD#: 2453784, Melville, New York). The watchdog’s move comes after prior infractions – all of which resulted in him being barred. Not only that, but seven of Leone’s clients brought complaints or lawsuits suggesting that he caused their losses. Notably, these disclosures suggest that Leone breached a fiduciary responsibility to his clients, churned accounts, and he violated FINRA rules and securities laws. Here’s what you need to know.

FINRA Bars Douglas Leone For Stonewalling

Evidently, in March 2020, the watchdog issued an indefinite suspension of Douglas Leone for failing to pay an Arbitration Award. However, the more egregious sanctions come from FINRA in May 2018 in which it barred Leone for allegedly impeding an investigation into his trading practices. Namely, FINRA investigated Leone’s trading to see if he made unsuitable recommendations and excessive trades. Leone did not testify as FINRA required under Rule 8210.

FINRA Bars Leone For Churning, Unsuitable Trading At SW Financial

In 2018, FINRA barred Douglas Leone for making bad recommendations and for excessive and unreasonable trades. Notably, FINRA also determined that Leone churned client accounts, trading mainly to generate commissions from clients. The watchdog indicated that Leone did not consider clients’ circumstances and objectives before making trades. Also, FINRA stated that clients did not benefit from Leone’s trading because of high costs. Moreover, Leone supposedly gave false information to clients, in one case overstating the value of the client’s account.

SW Financial Client Suggests That Douglas Leone Made Excessive Trades

Notably, a client of SW Financial filed a lawsuit about Douglas Leone in April 2019. First of all, the client alleged excessive trading on margin. It appears that the client did not have downside protection because of Leone. Secondly, the client cites Leone’s false and misleading statements about stock risks. Thirdly, the client indicated that Leone breached a fiduciary duty and breached a contract. It seems that Leone only cared about himself and he disregarded the client’s interests or suitability profile when trading. For this reason, the client demanded $250,000. It seems that this matter is still unresolved.

Leone Supposedly Churns Client Accounts, Engages in Unauthorized Trading

Apparently, a Salomon Whitney Financial client contested Douglas Leone’s actions in a FINRA Arbitration Claim from April 2018. Namely, the securities broker was seemingly churning the client’s account, trading excessively just to make money from the client. It seems that Leone negligently and unsuitably traded in the client’s account. Moreover, the Statement of Claim makes reference to Leone’s unauthorized trading and a breach of a Salomon Whitney Financial contract. It appears that the securities broker’s trading of stocks caused the client to generate losses. Consequently, the client demanded $22,623 in compensation from Leone or the securities firm. This matter is ongoing.

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