FINRA Sanctions South Florida Brokerage Firm For Rule 2121 Violation
Dawson James Securities, Inc. (CRD No. 130645) is a licensed FINRA broker-dealer headquartered in Boca Raton, Florida. Initially registered with the SEC in 2004, Dawson James Securities operates in 53 U.S. states in territories. On April 6th, 2021, FINRA announced the broker-dealer was being censured, fined $20,000, and ordered to pay $7,083.93 in financial restitution to affected investors over allegations it violated securities industry regulations. Here, our Miami investment fraud lawyers discuss the information released by FINRA and explain Rule 2122.
FINRA Sanctions: Dawson James Securities, Inc.
In the official Letter of Acceptance, Waiver, and Consent (NO. 2017052790301), Boca Raton, FL headquartered brokerage firm Dawson James Securities, Inc. agreed to FINRA’s proposed penalties without admitting or denying any wrongdoing. The Financial Industry Regulatory Authority alleges that the securities firm violated FINRA Rule 2121 and FINRA Rule 2010 when it improperly charged excessive commissions and fees to several of its customers. Dawson James Securities will pay a $20,000 fine, review and revise its internal practices, and refund a total of $7,083.93 to its investors.
FINRA Rule 2121: Fair Prices and Commissions
Brokerage firms and individual brokers are required to comply with securities industry rules and regulations. FINRA Rule 2121 is a rule that limits a firm’s ability to “mark-up” the cost of securities. It helps to ensure that investors are charged fair and reasonable prices and commissions for the securities purchase. As a basic guideline, the industry has adopted the “five percent policy”, which holds that most transactions should be marked up five percent or less. Though, the rule clearly states that the individual circumstances of the transaction will always determine what constitutes a fair and reasonable price or commission.
Investigation: Commissions Charged Were as High as 66 Percent
In this case, FINRA alleges that Dawson James Securities, Inc. overcharged several of its investors. The relevant period of review extends from June 2015 through April of 2020. During that time, Dawson James Securities processed certain transactions with commissions ranging between ff percent and 66 percent of the principal value of the transaction. FINRA’s investigators determined that some of these fees were improper and excessive given industry rules. They violated FINRA Rule 2121. By definition, a Rule 2121 violation is also a Rule 2010 violation. One of the most important securities industry regulations, FINRA Rule 2010 requires all brokers and brokerage firms to uphold high standards of commercial honor and integrity.
Call Our South Florida FINRA Lawyers for Legal Help and Support
At Carlson & Associates, P.A., our Miami-Dade County securities fraud lawyers possess the skills, knowledge, and legal experience to go up against large brokerage firms. If you believe that you suffered financial losses due to the improper conduct of your brokerage firm, our law firm is here as a resource. Give us a call today for your confidential, no obligation initial case assessment. We represent investors in Miami-Dade County, Southeastern Florida, and beyond.
Resources:
finra.org/sites/default/files/fda_documents/2017052790301%20Dawson%20James%20Securities%2C%20Inc.%20CRD%20130645%20AWC%20va.pdf
brokercheck.finra.org/firm/summary/130645
