David Michael Karandos of Indianapolis, Indiana, a stockbroker formerly registered with Dinosaur Financial Group LLC, has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that Karandos failed to cooperate with a FINRA investigation into allegations of Karandos’ unsuitable recommendations in the account of a Dinosaur Financial Group customer. Letter of Acceptance, Waiver, and Consent No. 2022073675001 (July 7, 2022).
According to the AWC, on November 13, 2019, a Form U5 (Uniform Termination Notice for Securities Industry Registration) was filed by Dinosaur Financial Group regarding Karandos’ termination as a stockbroker. On December 1, 2020, the regulator was notified by Dinosaur Financial Group about a customer who complained of Karandos’ purported unsuitable recommendations and withdrawals.
On June 13, 2022, Karandos was asked by FINRA to testify in the investigation. On June 24, 2022, Karandos acknowledged this request and refused to testify. Karandos’ failure to testify prevented FINRA from determining if he made unsuitable recommendations. He violated Rules 2010 and 8210 for refusing to cooperate in the investigation.
This is not the first time that Karandos has faced regulatory sanctions relating to his investment recommendations. Karandos was suspended from engaging in securities business by Indiana Securities Division in 2012 based upon the allegations that Karandos made unsuitable recommendations to customers. Karandos was also denied a registration in Michigan the following year because of his disciplinary history.
Karandos has been identified in seven customer initiated investment related disputes regarding allegations of his wrongdoing while employed by UBS Financial Services, Merrill Lynch, Morgan Stanley, and Dinosaur Financial Group. FINRA Public Disclosure shows that a customer initiated investment related complaint regarding Karandos’ conduct was settled for $27,500.00 in damages based upon accusations of unauthorized transactions concerning mutual funds while Karandos was employed by Merrill Lynch.
Another customer initiated investment related civil action involving Karandos’ activities was resolved for $493,000.00 in damages based upon the allegations of unsuitable recommendations involving alternative investments when Karandos was associated with UBS Financial Services. Civil Action Nos. 49D07-0908-CT-040006, 49D05-0907-PL-034768. The claim alleges breach of fiduciary duty by the stockbroker.
Karandos is also the subject of a customer initiated investment related civil action which was settled for $313,564.64 in damages supported by accusations of unsuitable recommendations and breach of fiduciary duty relating to illiquid and risky alternative investment transactions by Karandos during the time that he was registered with Morgan Stanley and UBS Financial Services. Civil Action Nos. 49D050907PL034768, 49D070908CT040006.
On May 14, 2020, a customer filed an investment related FINRA securities arbitration claim regarding Karandos’ conduct in which the customer sought $500,000.00 in damages based upon allegations of Karandos’ unsuitable advice between 2013 and 2017 as it pertained to direct investments, including limited partnership interests and direct participation program interests. FINRA Arbitration No. 20-00839. The claim alleges that the proceeds of a viatical settlement had been converted by Karandos while he was associated with Dinosaur Financial Group.
On November 10, 2020, a different customer filed an investment related civil action concerning Karandos’ activities where the customer requested more than $5,000.00 in damages founded on accusations that Karandos provided unsuitable recommendations to the customer as it pertained to alternative investments between October 2014 and May 2017 when Karandos was associated with DLG Wealth Management LLC. Civil Action No. 49D13-2107-PL-024276.
Karandos is additionally referenced in a customer initiated investment related written complaint on November 19, 2020, in which the customer sought $436,000.00 in damages based upon allegations of unsuitable trading between 2014 and 2018 during the time that Karandos was registered with Dinosaur Financial Group. The complaint alleges that the customer experienced damages on bad DPPs and LPs. According to the complaint, funds were improperly withdrawn by Karandos between 2016 and 2018.
On August 19, 2021, another customer filed an investment related FINRA securities arbitration claim involving Karandos’ conduct where the customer requested $500,000.00 in damages supported by accusations of Karandos’ unsuitable trading in an individual retirement account given the customer’s financial needs and holdings. FINRA Arbitration No. 21-02081. The claim also alleges Dinosaur Financial Group’s failure to supervise Karandos’ activities.
Karandos was employed by Dinosaur Financial Group between September 12, 2013, and November 13, 2019.
