Austin Richard Dutton Jr., of Doylestown, Pennsylvania, a stockbroker formerly registered with Newbridge Securities Corporation, is the subject of an enforcement action initiated by Financial Industry Regulatory Authority (FINRA) in which the regulator is seeking sanctions against Dutton based upon allegations that Dutton made unsuitable investment recommendations and falsified customer documents. Department of Enforcement v. Austin R. Dutton Jr., Disciplinary Action No. 2018059178401 (September 2023).
According to the Complaint, between May of 2014 and February of 2020, Dutton advised at least ten customers to invest over $1,200,000.00 in high-risk alternative investments, including non-traded business development companies (BDCs), non-traded real estate investment trusts (non-traded REITs), structured products, and other illiquid products, generating over $72,000.00 in commissions. Despite the customers’ limited investment experience, conservative investment objectives, and reliance on savings for income, Dutton recommended these speculative and illiquid securities, leading to unsuitable concentrations of their net worth and investable assets in those investments.
Most of Dutton’s victims included retired Philadelphia Police Officers and Firemen.
Moreover, Dutton is accused of inflating the net worth, investment objectives, and risk tolerances of several customers on 32 documents to get around the supervision of Newbridge Securities Corporation. He supposedly falsified customer records and caused inaccuracies on Newbridge’s official records. Therefore, FINRA alleged that Dutton violated FINRA Rules 2111, 4511, and 2010.
Furthermore, Dutton allegedly failed to timely respond to FINRA’s requests between April of 2022 and June 2023, regarding his sale of alternative investments. The regulator also accused him of failing to respond to additional FINRA requests in October of 2023 concerning a separate investigation into a potential private securities transaction. Therefore, the Complaint states that Dutton violated FINRA Rules 2010 and 8210.
On July 24, 2017, Dutton was charged by the Commonwealth of Pennsylvania, Department of Banking and Securities with the violation of Section 305(a)(ix) of the Pennsylvania Securities Act, and Regulation 305.019, as promulgated thereunder, for engaging in “dishonest or unethical practices in the securities business by recommending to a customer the purchase, sale, or exchange of a security without reasonable grounds to believe that the transaction or recommendation was suitable for the customer based upon reasonable inquiry concerning the customer’s investment objectives, financial situation and needs and other relevant information known by the agent.” Commonwealth v. Dutton, Docket No. 17-00046 (July 24, 2017)
FINRA Public Disclosure shows that Dutton is referenced in thirty (30) customer initiated investment related disputes concerning his conduct while associated with securities broker dealers, including American Trust Investment Services Inc., Newbridge Securities Corporation, and Primex. On February 13, 2020, a customer initiated investment related FINRA securities arbitration claim regarding Dutton’s conduct was settled for $30,000.00 in damages based upon allegations of unsuitable trading in structured products, REITs, and corporate debt products during the time that he was associated with Newbridge Securities Corporation. FINRA Arbitration No. 18-01355.
On February 2, 2023, a customer filed an investment related FINRA securities arbitration claim involving Dutton’s conduct in which the customer requested $130,000.00 in damages based upon allegations that Dutton was negligent, breached a contract, breached his fiduciary duty, violated Pennsylvania Securities Act, and fraudulently induced the customer to hold alternative investments and real estate investment trusts when Dutton was associated with Newbridge Securities Corporation. FINRA Arbitration No. 23-00241.
On December 8, 2023, a different customer filed an investment related FINRA securities arbitration claim involving Dutton’s conduct in which the customer requested damages ranging from $500,000 to $1,000,000, based upon allegations that Dutton breached his fiduciary duty, was negligent, and breached a contract in connection with the sale of alternative investments during the time that Dutton was associated with American Trust Investment Services Inc. FINRA Arbitration No. 23-03271. The claim also alleged that ATIS failed to supervise certain representatives.
Dutton was the subject of another customer initiated investment related FINRA securities arbitration claim that was settled on December 20, 2023, for $22,500.00 in damages. The claim alleged breach of contract, breach of fiduciary duty, negligence, and failure to supervise certain representatives in connection with the sale of alternative investments. This was in relation to Dutton’s conduct when associated with Newbridge Securities Corporation. FINRA Arbitration No. 22-02684.
Dutton was also named in an investment related FINRA securities arbitration alleging violation of federal securities laws, violation of Pennsylvania securities laws, common law fraud, breach of contract, breach of fiduciary duty, and negligence in connection with the sale of bonds. FINRA Arbitration No. 22-01509. The arbitration resulted in an Award on May 24, 2023, where Dutton was found liable and ordered to pay the investor $43,644.69 in compensatory damages.
As of July 26, 2023, this Award had not been paid by Dutton.
Dutton was associated with American Trust Investment Services Inc. in Doylestown, Pennsylvania, from June 15, 2021, to January 7, 2022. Prior to that, he was associated with ATIS in Whiting, Indiana, from May 27, 2020, to June 9, 2021.
