David Khezri of Melville New York a stockbroker formerly registered with Worden Capital Management and Network 1 Financial Securities Inc. is the subject of a Financial Industry Regulatory Authority (FINRA) investigation in which the regulator recommended that Khezri face disciplinary action for possible violations of FINRA rules and securities laws pertaining to excessive and unsuitable trading. FINRA Case No. 20200668876 (May 26, 2021).
According to FINRA Public Disclosure, Khezri might face disciplinary action for potentially churning customer accounts in violation of FINRA Rules 2010 and 2020, Securities Exchange Act of 1934 Section 10(b), and Securities and Exchange Commission (SEC) Rule 10b-5.
Khezri also might face disciplinary action for potentially making excessive trades and qualitatively unsuitable trades in customer accounts in violation of FINRA Rules 2010 and 2111. The regulator additionally stated that Khezri potentially used margin without permission and made unauthorized trades violating FINRA Rules 2010 and 3260.
Khezri has been sanctioned twice. He was fined $5,000.00 and suspended from associating with any FINRA member in any capacity supported by findings that he made unauthorized trades in customer accounts when he was associated with Cape Securities. Letter of Acceptance Waiver and Consent No. 2015044589701 (Sept. 24, 2015). According to the AWC, Khezri effected approximately 100 trades in the accounts of six customers on a discretionary basis when he lacked written authorization. Khezri violated FINRA Rule 2010 and National Association of Securities Dealers (NASD) Conduct Rule 2510(b).
Khezri has been identified in three customer initiated investment related disputes regarding allegations of his improper actions while registered with securities broker dealers including Cape Securities, Joseph Stone Capital and Milestone Financial Securities Inc. FINRA Public Disclosure shows that a customer filed an investment related complaint concerning Khezri’s activities where the customer requested $49,000.00 in damages based upon accusations that securities trades were effected on an excessive basis by Khezri at Milestone Financial Securities.
Khezri is also referenced in a customer initiated investment related FINRA securities arbitration claim in which the customer sought $235,635.00 in damages founded on allegations of negligence and breach of fiduciary duty by Khezri concerning his trading of over-the-counter equities and stocks at Joseph Stone Capital. FINRA Arbitration No. 19-03741 (Mar. 6, 2020). According to the claim, Joseph Stone Capital failed to supervise Khezri’s over-the-counter equities trades resulting in harm to the customer’s account.
On March 15, 2021, another customer filed an investment related FINRA securities arbitration claim regarding Khezri’s conduct where the customer requested $187,000.00 in damages based on accusations of negligence and breach of contract in regard to real estate investment trusts (REITs) and over-the-counter equities that they invested in through Khezri and Cape Securities. FINRA Arbitration No. 20-04169. According to the claim, state and federal securities laws were violated. The customer’s account was excessively traded and churned by Khezri according to the claim. Allegations additionally include breach of fiduciary duty and Cape Securities’ failure to supervise Khezri’s actions.
Khezri’s registration with Joseph Stone Capital was terminated on July 6, 2017. He was registered with Worden Capital Management between June 12, 2017 and March 10, 2020. He was also registered with Network 1 Financial Securities Inc. between March 10, 2020 and August 6, 2021.
Khezri has been associated with five different securities broker dealers who have been expelled by regulators for violation of federal securities laws or are otherwise defunct.