FINRA Suspends Tory Duggins after Allegations of Excessive Trading
According to the Financial Industry Regulatory Authority (FINRA), the regulator has reportedly suspended financial advisor Tory Duggins (CRD#: 4556340) from acting as a broker for 18 months.
Duggins allegedly willfully violated the Best Interest Obligation under Rule 15l-1 of the Exchange Act (Regulation BI) by recommending a series of excessive trades to customers, some of whom were seniors, according to FINRA’s findings.
The findings stated that Duggins’ customers relied on his advice and routinely followed his recommendations and, as a result, he exercised de facto control over the customers’ accounts.
Significant Investment Losses
Duggins’ alleged trading resulted in significant losses, according to FINRA.
Specifically, Duggins’ trading in the customers’ accounts allegedly generated total trading costs of $444,176, including $343,416 in commissions, and caused $235,494 in total realized losses.
This trading was purportedly excessive, unsuitable, and not in the best interest of the customers given their investment profiles.
Further, FINRA reportedly indicated that a customer sent Duggins an email complaining that he excessively traded the customer’s account and seeking $17,500 in compensatory damages. Duggins allegedly received and read the email but did not forward the customer complaint to his member firm’s compliance department as required by the firm’s policies.
According to FINRA, in light of Duggins’ financial status, no monetary sanction has been imposed. The settlement includes a finding that “Duggins willfully failed to disclose a material fact on a Form U4, and that, this omission makes him subject to a statutory disqualification with respect to association with a member.”
Prior Regulatory Actions
In November 2014, Duggins reportedly entered into an AWC with FINRA for exercising discretion in two customer accounts without written authorization and for making related false statements on a firm compliance questionnaire in violation of FINRA Rules. FINRA reportedly suspended Duggins for one month in all capacities and fined him $7,500.
In June 2017, a FINRA arbitration panel reportedly entered a judgment against Duggins for $26,127 in connection with a customer arbitration alleging unsuitable recommendations and the improper use of margin. FINRA allegedly suspended Duggins for approximately one month for failing to comply with the arbitration award pursuant to Article VI, Section 3 of FINRA By-Laws and FINRA Rule 9554.
Churning and Excessive Trading
Churning occurs when a broker makes an excessive number of trades within a client’s account, primarily for the purpose of generating commissions or fees for themselves.
These trades are typically unnecessary and serve no legitimate investment purpose. Instead, they are intended to generate income for the broker, often at the expense of the client. Churning can be costly due to transaction costs and capital losses due to the frequent trading.
Excessive trading and churning violate securities laws and regulations because it breaches the fiduciary duty that brokers and advisors owe to their clients. They are expected to act in the best interests of the client and not engage in trading solely to benefit themselves.
FINRA BrokerCheck – Tory Duggins
The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.
Investors can use the tool to verify whether a broker or brokerage firm is registered with FINRA, as well as to review their employment history, licensing status, and any regulatory actions or complaints filed against them.
Tory Duggins reportedly has four customer complaints on his record for allegations of unauthorized trades, excessive trading, and excessive commissions. He was reportedly registered with the following brokerage firms during his career in the securities industry, among others:
02/29/2016 – 01/31/2024, SPARTAN CAPITAL SECURITIES, LLC (CRD#:146251), NEW YORK, NY
01/30/2014 – 03/11/2016, AVENIR FINANCIAL GROUP (CRD#:148490), FINRA expelled the firm on 09/19/2016, NEW YORK, NY
11/16/2012 – 01/31/2014, NATIONAL SECURITIES CORPORATION (CRD#:7569), NEW YORK, NY
Free Consultation with National Securities Attorneys
If you have suffered investment losses with Tory Duggins and Spartan Capital, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
About the White Law Group
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors to recover their securities fraud losses.
Last modified: September 11, 2024
