Arkady Ginsburg of New York, New York, a stockbroker registered with Aegis Capital Corp., has been censured by the State of Maryland because he was sanctioned by Financial Industry Regulatory Authority (FINRA) for unsuitable and excessive trading. Consent Order No. 20220157 (June 14, 2022). Ginsburg’s registration has been withdrawn in the state, and he agreed not to reapply for stockbroker or investment advisor representative registration.
Ginsburg was suspended for six months from associating with any FINRA member in any capacity and was ordered to pay restitution to a customer because Ginsburg engaged in excessive and unsuitable trading in customer accounts at Aegis Capital Corp. Letter of Acceptance, Waiver, and Consent No. 2019064898601 (March 23, 2022).
According to the AWC, between August of 2014 and June of 2020, the trading activities Ginsburg conducted in these customers’ portfolios, two of which were heavily dependent on borrowed funds, resulted in high cost-to-equity ratios and high frequency of trades. This trading activity also led to substantial losses and trading expenses. Because Ginsburg suggested these trades and the customers usually followed his advice, Ginsburg influenced the volume and regularity of trading in the portfolios, exerting indirect control over these accounts. During this period, Ginsburg earned a total commission of $113,591.00 from these accounts.
The AWC stated that Customer A started an account at Aegis Capital Corp. in August of 2014 with an initial deposit of $202,000.00 and later deposited approximately $66,000.00. Between August of 2014 and December of 2015, Ginsburg executed 252 trades in Customer A’s account, which relied heavily on borrowed funds. These trades resulted in an annual cost-to-equity ratio of 48.68 percent and an annual turnover rate of 50.7. The stockbroker’s trading led to market losses of $157,539.00 for Customer A, while Ginsburg made $32,255.00 in commissions.
Customer B started investing at Aegis Capital Corp. in March of 2018, following an unsolicited phone call from Ginsburg, and deposited approximately $1,600,000 in their account. Between March of 2018 and June of 2020, Ginsburg made 384 trades in Customer B’s account, which also used borrowed funds. These trades resulted in an annual cost-to-equity ratio of 34.55 percent and an annual turnover rate of 17.78. Due to Ginsburg’s trading activities, Customer B experienced losses of $509,863.00, while Ginsburg received commissions of $76,303.00.
FINRA indicated that Customer C invested through Ginsburg at Aegis Capital Corp. in February 2018 and funded the account with $100,000.00. After an anticipated initial public offering (IPO) he was set to take part in fell through, Customer C withdrew about $90,000.00 from the account. However, in January of 2019, at Ginsburg’s recommendation, he deposited $30,000.00 more into the account. Between January of 2019 and May of 2020, Ginsburg’s trades in Customer C’s account resulted in an annual cost-to-equity ratio of 30.82 percent and an annual turnover rate of 8.88. Due to Ginsburg’s trading activities, Customer C incurred losses of $19,238.39, while Ginsburg made $5,033.00 in commissions.
FINRA found that Ginsburg violated Rules 2010 and 2111.
Public Disclosure shows that Ginsburg is referenced in a customer initiated investment related FINRA securities arbitration claim that was settled for $12,635.22 in damages based upon allegations that Ginsburg engaged in unauthorized trading and provided unsuitable investment advice during the time that Ginsburg was associated with Aegis Capital Corp. FINRA Arbitration No. 18-00408 (May 30, 2019).
Ginsburg has been registered with Aegis Capital Corp. since July 2, 2014.
