South Florida Broker Suspended for Eight Months for Unsuitable Investment Recommendations
David H. Fagenson (CRD#: 1652012) is an actively registered securities broker and investment advisor. Since December of 2016, Mr. Fagenson has been employed at Newbridge Securities Corporation in Boca Raton, Florida. Previously, this representative was also associated with UBS Financial Services (2010 to 2016) and Merrill Lynch (2004 to 2010).
On November 21st, 2018, the Financial Industry Regulatory Authority (FINRA) suspended Mr. Fagenson for eight months after concluding that he offered unsuitable investment guidance to at least three different elderly customers. Here, our Miami unsuitable investment attorneys review the allegations against this broker. All information referenced in this article has been sourced directly from FINRA Disciplinary Proceeding NO. 2017052874401.
Suspended Broker: EX-UBS Financial Services Broker David H. Fagenson
Background
According to FINRA, the misconduct in this case occurred between January of 2012 and September of 2016. During that time, David H. Fagenson was employed at UBS Financial Services and he was based in a branch office in Palm Beach, Florida. While in this position, investigators allege that Mr. Fagenson engaged in quantitatively unsuitable trading within the brokerage accounts of three senior investors.
Unsuitable Investment Recommendations
FINRA contends that Mr. Fagenson violated Rule 2111, which requires financial advisors to have a reasonable basis to recommended and execute individual trades and overall trading strategies to their investors. Quantitatively unsuitable trading occurs when a financial advisor makes a high amount of trades — which, while they may each be suitable when taken individually, are not suitable when viewed together. This type of misconduct is sometimes referred to as churning or excessive trading.
As an example, Mr. Fagenson managed the brokerage account of a 95-year-old investor who had more than $5 million in assets. Based on Fagenson’s experienced, frequent trading strategy, her account had a turnover rate of 16.07 and an annualized cost-to-equity ratio that exceeded 30 percent. While she wanted only moderate risk, this high turnover rate made very difficult for this investor to actually make gains. While working with Mr. Fagenson, her account lost more than $280,000 in value. At the same time, he took in more than $260,000 in commission and fees.
Sanctions
Without admitting or denying any wrongdoing in this case, David H. Fagenson consented to FINRA’s proposed penalties, which include an eight month suspension from the securities industry. In its settlement with this broker, FINRA noted that no monetary penalties were being assessed, in part, because Mr. Fagenson filed for personal bankruptcy protection in March of 2018. Investor complaints against this financial advisor were settled by his former employer, UBS Financial Services, and two FINRA arbitration claims are currently pending against this broker.
Get Help From a Miami, FL Unsuitable Investments Lawyer Today
At Carlson & Associates, P.A., our securities fraud lawyers are strong advocates for investors. We have extensive experience handling unsuitable investment cases. If you or a loved one sustained significant losses as a result of your financial advisor’s unsuitable investment recommendations, please do not hesitate to call or Miami law office at (305) 372-9700 to schedule a fully confidential consultation.
Resources:
finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=9859&print=1
brokercheck.finra.org/individual/summary/1652012
inra.org/sites/default/files/fda_documents/2017052874401%20David%20Fagenson%20CRD%201652012%20AWC%20va.pdf
