David Nathan Hale of San Francisco California a stockbroker currently registered with Purshe Kaplan Sterling Investments is referenced in a customer initiated investment related written complaint which was settled on April 23, 2019 for $12,113.11 in damages founded on allegations that the customer’s investment account had been subject of “reverse churning” by Hale as it pertained to their investment advisory accounts. Reverse churning is generally when a customer pays a management fee, but the broker fails to manage or effect transactions in the underlying account.
These claims are difficult. However, as a general proposition, pursuant to Notice to Members 03-68, brokerage firms or member firms are required to evaluate customer accounts, based upon costs and commissions, “at least annually” to determine whether “the type of account is appropriate in light of the services provided,” or if “alternative fee structures” are available. Notice to Members 03-68 (“It generally is inconsistent with just and equitable principles of trade—and therefore a violation of Rule 2110—to place a customer in an account with a fee structure that reasonably can be expected to result in a greater cost than an alternative account offered by the member that provides the same services and benefits to the customer.”); See also, NASD Dept. of Enforcement v. Morgan Stanley DW, Inc.NASD Dept. of Enforcement v. Morgan Stanley DW, Inc, Action No. EAF 030116001 (July 27, 2005)($1.5 million fine and $4.6 order of restitution to customers for “failure to establish and maintain an adequate system of supervision, including written procedures, reasonably designed to review and monitor fee based vs. commission based business”)(additional citations omitted)
Financial Industry Regulatory Authority (FINRA) Public Disclosure also confirms that Hale is the subject of a customer initiated investment related written complaint where the customer sought more than $5,000.00 in damages based upon accusations that their account had been churned by the stockbroker during the time that he was associated with UBS Financial Services Inc.
Hale has been registered as a stockbroker with Purshe Kaplan Sterling Investments since July 23, 2018. He is also registered as an investment adviser representative of Perigon Wealth Management LLC as of May 1, 2018.
