Alan Zelig Appelbaum of Boca Raton, Florida, a stockbroker formerly registered with Aegis Capital Corp., was the subject of a customer initiated investment related Financial Industry Regulatory Authority (FINRA) securities arbitration claim that was settled for $280,000.00 in damages based upon allegations that Appelbaum made unsuitable investment recommendations and engaged in other misconduct in connection with the sale of structured products when Appelbaum was associated with Aegis Capital Corp. FINRA Arbitration No. 21-01306 (Feb. 18, 2022).
On September 23, 2022, Appelbaum was barred from associating with any FINRA member in any capacity based upon allegations that Appelbaum failed to provide information and documents to FINRA when it investigated possible violations of FINRA rules. FINRA Enforcement (AWC) No. 2021072524501.
According to the AWC, on May 14, 2021, Aegis Capital Corp. filed a Uniform Termination for Securities Industry Registration (Form U5) with FINRA, indicating that they had terminated Appelbaum’s association with the firm. Aegis alleged that Appelbaum failed to follow firm procedures and exercised discretion without the client’s prior written authorization. FINRA began investigating Appelbaum in connection with his sales of complex structured products. Pursuant to their investigation, FINRA sent Appelbaum a request for documents and information on July 19, 2022. On July 29, 2022, through his counsel, Appelbaum requested an extension of the response date for FINRA’s request for documents and information. Then on August 16, 2022, Appelbaum indicated that he received FINRA’s requests but would not produce the documents and information. As a result, Appelbaum violated FINRA Rules 2010 and 8210.
On July 28, 2022, the US Securities and Exchange Commission filed this a Complaint against Appelbaum in the Southern District of Florida alleging that from at least July 2017 through at least May 2019, Appelbaum disregarded his obligations to his customers and repeatedly violated the antifraud provisions of the federal securities law by making unsuitable recommendations and by engaging in unauthorized trading. Specifically, from July 2017 to May 2019, Appelbaum made over 140 unsuitable recommendations and purchases of highly complex structured products for seven retail customers. US Securities & Exchange Commisson v. Appelbaum, Civil Action No. 9:22-cv-81115 (July 28, 2022).
Also on July 28, 2022, the US Securities and Exchange Commission filed an adminstrative action against Aegis and found that:
“Eleven Aegis registered representatives in Aegis’s Melville, New York branch officeand three Aegis RRs in Aegis’s Boca Raton, Florida branch office recommended variable interest rate structured products (“VRSPs”) to forty-eight Customers for whom the investments were unsuitable in light of each Customer’s investor profile and account information.”
“An Aegis registered representative in the Boca Branch who also was a Managing Director, made at least 1,000 unauthorized trades in seven Customers’ non-discretionary brokerage accounts between September 2015 and May 2019. Aegis registered representatives in the Boca
Branch made material misstatements and omissions about the VRSPs to Customers, falsely stating, in substance, that the Customers were guaranteed to receive their full invested principal at maturity from investing in VRSPs that, in fact, did not guarantee principal protection.”
Aegis was ordered to pay disgorgement of $165,828 plus prejudgment interest of $55,037 and a civil money penalty in the amount of $2,300,000 to the SEC. Administrative Proceeding File No. 3-20940.
FINRA Public Disclosure shows that Appelbaum is referenced in twenty (20) other customer initiated investment related disputes concerning Appelbaum’s conduct while associated with securities broker dealers , including Herbert J. Sims Co. Inc. On August 11, 2015, a customer initiated investment related FINRA securities arbitration claim involving Appelbaum’s conduct was settled for $35,000.00 in damages based upon allegations that Appelbaum made unsuitable recommendations and churned the customer’s account when Appelbaum was associated with Herbert J. Sims Co. Inc. FINRA Arbitration No. 19-00947.
On November 3, 2015, a FINRA securities arbitration claim involving Appelbaum’s conduct was settled for $20,000.00 in damages based upon allegations that Appelbaum made unsuitable recommendations in connection with the sale of structured products when Appelbaum was associated with Herbert J. Sims Co. Inc. FINRA Arbitration No. 15-03085. Appelbaum is also referenced in a complaint on October 14, 2020 in which the customer requested $1,800,000.00 in damages based upon allegations that Appelbaum made unsuitable recommendations with regard to the sale of corporate bonds when Appelbaum was associated with Aegis Capital Corp.
On January 27, 2021, a FINRA securities arbitration claim involving Appelbaum’s conduct was settled for $1,650,000.00 in damages based upon allegations that Appelbaum made unsuitable recommendations and engaged in unauthorized trading when Appelbaum was associated with Aegis Capital Corp. FINRA Arbitration No. 19-02773.
FINRA Public Disclosure shows that Appelbaum has been fined $10,000.00 and censured by NASD based upon allegations that Appelbaum violated MSRB rules. Case No. C07900052 (Jan. 23, 1991). On December 27, 2006, Appelbaum was fined $55,000.00 based upon allegations that Appelbaum engaged in unlicensed activity relating to NH residents’ brokerage accounts. Case No. INV06-026.
Appelbaum was associated with Aegis Capital Corp. from July 8, 2015 to May 14, 2021.
