Dana Davis of Newbridge Allegedly made Unsuitable Recommendations
According to the Financial Industry Regulatory Authority (FINRA), the self- regulator who oversees brokers and brokerage firms, has reportedly suspended Dana Davis (CRD #1707708) from the securities industry.
Between July 2015 and June 2020, while he was associated with Newbridge Securities, Davis recommended unsuitable use of margin to effect trades in the accounts of three customers. Davis’s unsuitable recommendations purportedly caused the customers to pay more than $150,000 in commissions, fees, and margin interest, according to a Letter of Acceptance Waiver and Consent (AWC). Davis reportedly violated FINRA Rules 2111 and 2010.
Unsuitable use of Margin
FINRA Rule 2111 requires that a registered representative has a reasonable basis to believe that a recommended transaction is suitable for the customer based on the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance and any other information the customer may disclose to the member or associated person in connection with a recommendation.
If a registered rep violates FINRA Rule 2111 then they are also in violation of FINRA Rule 2010, which requires that member firms and associated persons ”observe high standards of commercial honor and just and equitable principles of trade” while conducting business.
In a brokerage account, margin is essentially a loan from the broker to the investor that allows the investor to buy securities with borrowed money. The investor can then use the securities as collateral for the loan. However, margin trading involves significant risks and can lead to substantial losses, including the loss of the entire investment.
According to the AWC, Davis allegedly recommended the unsuitable use of margin in the accounts of customers-who were not experienced or sophisticated investors and didn’t understand margin. Nevertheless, Davis recommended the extensive use of margin in his customers’ accounts to leverage additional buying power while charging commissions on both buy and sell transactions.
Davis’s recommendations to engage in allegedly unsuitable trading on margin exposed his customers to significant risk, increased costs, and sizeable losses in their accounts. He purportedly lacked a reasonable basis to believe that using margin in this way was suitable given the customers’ investment objectives, financial situation, and needs.
In addition to the 12-month suspension from the securities industry, FINRA has ordered Davis to pay $75,000 in partial restitution.
Dana Davis – FINRA BrokerCheck Profile
Dana Davis purportedly has 9 customer complaints on his broker record. Allegations include: overconcentration, misrepresentation, omissions, unsuitable recommendations, and breach of fiduciary duty, among others. According to his FINRA broker profile, Davis was affiliated with the following firms, among others, during his securities career:
10/18/2022 – 03/07/2023, ALEXANDER CAPITAL, L.P. (CRD#:40077), NEW YORK, NY,
B, 09/28/2006 – 10/17/2022, NEWBRIDGE SECURITIES CORPORATION (CRD#:104065), HAUPPAUGE, NY
B, 02/26/2002 – 09/29/2006, FIRST MONTAUK SECURITIES CORP. (CRD#:13755), HAUPPAUGE, NY
Broker Due Diligence
Brokers and brokerage firms owe a duty of care and loyalty to their customers. The broker must use the standard of care and diligence needed to protect the customer’s interest. Failure to fulfill that duty may constitute negligence or malpractice by a broker. The duty of loyalty requires that the broker refrain from self-dealing and place the interests of the customer first.
FINRA Dispute Resolution is an arbitration venue for investors with claims against their brokerage firm or financial professional. It provides investors with an opportunity to attempt to recoup their investment losses and is an alternative to filing such claims in court.
If you have suffered losses investing with Dana Davis, 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. 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 40 years of securities law experience, including experience working at FINRA and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses. For more information, please visit our website, www.whitesecuritieslaw.com.
Tags: Dana Davis FINRA, Dana Davis investigation, Dana Davis investment losses, Dana Davis lawsuit, Dana Davis litigation, Dana Davis recovery options, Dana Davis Dana Davisfinancial advisor, securities fraud attorney Last modified: April 5, 2023