Dakota Securities International Inc. a brokerage firm headquartered in Florida, and Bruce Martin Zipper (the president, Chief Executive Officer and Chief Compliance Officer of Dakota Securities International) have been sanctioned by Financial Industry Regulatory Authority (“FINRA”) according to a National Adjudicatory Council Decision which affirmed a Hearing Panel’s findings that (1) Zipper associated with the firm while under suspension and (2) the firm permitted Zipper to engage in investment related activities on the firm’s behalf even though Zipper was suspended. In the Matter of Department of Enforcement v. Dakota Securities International Inc. et al. Complaint No. 2016047565702 (Mar. 18, 2019).
Evidently, on April 1, 2016, Zipper was suspended for three months from associating with any FINRA member in any capacity based upon findings that he failed to report judgments entered against him that were unsatisfied. Letter of Acceptance, Waiver and Consent No. 2015046512101 (Apr. 22, 2016).
The Decision stated that Zipper failed to cooperate with the terms of the AWC. Particularly, while under suspension, Zipper was routinely corresponding with customers of the firm in reference to their Dakota Securities International accounts. Apparently, the firm’s interim president, Robert Lefkowitz, did not screen Zipper’s e-mails to make sure Zipper was not engaging in securities business on behalf of the firm. Moreover, Zipper’s trading system access was never restricted by the firm when Zipper was under suspension. Consequently, the system was accessed by Zipper to monitor trades executed in customer accounts. Critically, the Decision stated that Zipper’s computer was utilized to effect trades in customer accounts. Evidently, Robert Lefkowitz and Zipper also misclassified the identity of the representative responsible for executing trades in customer accounts.
The Decision stated that in one case, Zipper advised customers to buy stock positions after he claimed to have liked the stock and felt that it was a good fit for the customer’s investment portfolio. Evidently, two thousand shares were purchased by the customer’s spouse as a result. The Decision also detailed another situation in which a customer was advised by Zipper to sell stocks from the customer’s investment portfolio. Zipper even reportedly took part in negotiating the resolution of a customer initiated investment related arbitration claim in which he called upon the firm’s minority owner to meet with him to strategize. FINRA found that Zipper’s investment-related communications, investment recommendations, and involvement in settlement negotiations evidenced him engaging in conduct which required registration.
Supposedly, the firm knew about Zipper’s activities but failed to take any meaningful action. Ultimately, National Adjudicatory Council affirmed the Hearing Panel Decision, finding that Zipper maintained an association with the firm while under suspension; conduct violative of FINRA Rule 2010; FINRA By-Laws Article III, Section 3(b); and National Association of Securities Dealers (NASD) Rule 1031. Additionally, the National Adjudicatory Council found that by the firm enabling Zipper to participate in securities related business while under suspension, it’s conduct was violative of FINRA Rules 2010, 8311, FINRA By-Laws Article III, Section 3(b) and NASD Rule 1031. Moreover, FINRA’s National Adjudicatory Council found the firm and Zipper’s false trading records as violative of FINRA Rules 2010 and 4511; and the firm’s supervisory failures violative of FINRA Rules 2010 and 3110. Consequently, FINRA barred Zipper in all capacities and expelled Dakota Securities International.
FINRA Public Disclosure reveals that Zipper is referenced in a customer initiated investment related arbitration claim which was resolved for $50,000.00 in damages supported by accusations of Zipper making unsuitable equity trades in the customer’s investment accounts while associated with Dakota Securities International. FINRA Arbitration No. 14-03006 (Feb. 24, 2015).
Zipper was terminated by Dakota Securities International on November 13, 2017.
