On July 19, 2013, two South Florida brokers were barred by the Financial Industry Regulatory Agency (FINRA). In an article from the Sun Sentinel, Donna Gehrke-White writes that they were both accused of mishandling money. However, one case is on appeal and the sanctions don't take effect, pending the appeal.
Alan Jay Davidofsky, Delray Beach, was fined $11,741.78 and barredd from working in the brokerage industry after he was accused of making unauthorized trades for a client that at one point caused her to lose nearly all of her Individual Retirement Account (IRA), FINRA records show.
According to FINRA's records, Davidofsky made 82 unauthorized trades just as the Great Recession began, between December 2007 to October 2008.
"During the 10-month period that Davidofsky implemented his revised trading strategy, JL's individual retirement account lost approximately 90 percent of its value, which equated to an account balance decline of approximately $108,000," according to FINRA records.
After the client complained, Davidofsky's employer, Oppenheim & Co., investigated, fired Davidofsky, paid the client $100,000 as a "refund for account losses," and turned over the matter to FINRA, according to a statement from the regulatory group. FINRA's Office of Hearing Officers ruled Davidofsky had violated rules of the National Association of Securities Dealers and ordered him out of the brokerage business. Davidofsky appealed to the National Adjudicatory Council that reviews FINRA disciplinary proceedings. The council agreed with the original hearing officers' decision, according to a statement released by FINRA this week.
"Unauthorized trading in a customer's account is a fundamental betrayal of the duty owed by a salesman to his customer," the council found. Davidofsky "undertook the excessive trading in the customer's account to solidify his tenuous employment position at the firm," the council added.
Also, writes Gehrke-White, South Florida broker, Alfred Pierrepont Reeves III of Hallandale Beach has appealed to the National Adjudicatory Council after he was banned from brokerages and ordered him to pay $28,704.93, plus interest, in restitution to his former employer. The sanctions are not in effect until the council rules on his appeal from the ruling from FINRA's Office of Hearing Officers.
Alfred P. Reeves is accused of keeping money that he knew was not for him. His former employer's clearing firm had paid $59,704 to Reeves' consulting company "because it had not been notified that he was no longer at the firm and should be removed as the designated billing contact," the hearing panel decided.
Reeves did not correct the error but "immediately began withdrawing money from the account, transferring money to his ex-wife's account and paying personal expenses," according to a FINRA statement. Reeves eventually repaid $31,000 to the clearing firm but "had not repaid the balance," the panel found.
If you’ve experienced investment losses due to your stock broker/financial advisor’s recommendations, call Soreide Law Group for a free consultation with an attorney on how to potentially recover your losses: 888-760-6552.
