Andre Pierre Davis of Red Bank New Jersey a stockbroker formerly registered with First Standard Financial Company LLC has been issued a Summary Revocation and Penalty Order by New Jersey Bureau of Securities in which his stockbroker registration has been revoked and he has been fined $1,000,000.00 based upon findings of Davis making unsuitable and unauthorized trades which caused damages to First Standard Financial customers. In the Matter of Andre P. Davis (Dec. 28, 2020).
According to the Order, between 2015 and 2019, unsuitable, excessive and unauthorized trades had been made by Davis in customer accounts. An active trading strategy was utilized for customers who had limited investment experience and who confided in the stockbroker with their retirement and life savings.
The Order stated that trades were often made on margin or without authorization in accounts in which Davis generated commissions. Davis’ trading caused customers’ accounts to sustain losses on bad trades. His commissions and fees magnified those losses. The regulator also indicated that customers’ losses were attributed to Davis overconcentrating their accounts in risky securities.
The Order shows that between January of 2016 and May of 2019, more than $7,500,000.00 in commissions were generated on transactions which caused investors to suffer losses.
In one case, between May of 2016 and June of 2019, Davis caused a customer’s account to have a 43 percent cost-to-equity ratio. Davis’ imposition of $187,719.00 in fees and commissions caused the customer to have to earn 43 percent on an annual basis just to break even. The customer experienced a $109,944.00 loss because of unsuitable and excessive trades by Davis.
Davis recommended trades to enrich his commissions without any regard for the suitability of transactions. The stockbroker violated NJSA 49:3-52(b), NJSA 49:3-52(c).
Davis has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that Davis neglected to cooperate with a FINRA investigation into allegations of his unsuitable and excessive trading while he was registered with First Standard Financial. Letter of Acceptance Waiver and Consent No. 2018057640301 (Mar. 3, 2020). FINRA determined that Davis violated Rules 2010 and 8210 because of his refusal to provide the regulator with information and documents relating to his trading.
FINRA Public Disclosure shows that Davis has been identified in 16 customer initiated investment related disputes concerning accusations of his harmful activities while employed by Newbridge Securities Corporation, First Montauk Securities Corp and First Standard Financial. On August 6, 2019, a customer filed an investment related FINRA securities arbitration claim involving Davis’ conduct in which the customer sought $350,000.00 in damages founded on allegations of stocks being traded by Davis without the customer’s permission at First Standard Financial. FINRA Arbitration No. 19-02132. The claim alleges that Davis’ unsuitable and excessive trades resulted in damages.
Davis is also referenced in a customer initiated investment related complaint on June 20, 2019 where the customer requested $152,400.00 in damages based upon accusations that their account was churned and that unauthorized stock trades were executed by Davis at First Standard Financial. The complaint alleges that the customer’s account poorly performed. On June 21, 2019, another customer filed an investment related FINRA securities arbitration claim regarding Davis’ activities in which the customer sought $461,000.00 in damages supported by allegations that unsuitable and excessive trades were effected by Davis. FINRA Arbitration No. 19-01679. The claim alleges that the customer did not authorize over-the-counter equities trades.
Davis is also the subject of a customer initiated investment related FINRA securities arbitration claim where the customer requested $5,000,000.00 in damages supported by accusations including negligence and the breach of a fiduciary duty by Davis relating to securities transactions he effected at First Standard Financial. FINRA Arbitration No. 20-02355 (July 24, 2020). The claim alleges negligence and fraud.
Davis was registered with First Standard Financial between March 17, 2015 and May 30, 2019. He was associated with Paulson Investment Company between July 17, 2019 and March 2, 2020.