Securities Arbitration

Donald Stephen Woods of Louisville Kentucky a stockbroker formerly registered with LPL Financial LLC is the subject of a customer initiated investment related written complaint on April 30, 2021 where the customer sought $69,000.00 in damages based upon accusations of Woods making unsuitable recommendations of business development companies and real estate securities when he was associated with LPL Financial LLC. The complaint also alleges that alternative investment purchases had been misrepresented by Woods.

Financial Industry Regulatory Authority (FINRA) Public Disclosure shows that Woods has been identified in 11 additional customer initiated investment related disputes containing allegations of his wrongdoing while employed by LPL Financial. On February 28, 2019, a customer initiated investment related complaint involving Woods’ conduct was resolved for $10,000.00 in damages supported by accusations of bad advice and misrepresentations by Woods concerning REIT purchases for the customer’s account when Woods was associated with LPL Financial.

Woods is referenced in another customer initiated investment related written complaint on February 11, 2019 in which the customer requested $350,000.00 founded on allegations of misrepresented BDC and real estate security trades by Woods which resulted in losses to the customer. On May 13, 2020, a different customer initiated investment related complaint concerning Woods’ conduct was settled to resolve accusations that Woods misrepresented information to the customer concerning alternative investments that they purchased through him at LPL Financial. According to the complaint, Woods provided poor investment recommendations to them.

Also on May 13, 2020, a customer initiated investment related complaint regarding Woods’ conduct was resolved for $20,000.00 in damages based upon allegations that fees and risks were not made known to the customer by Woods prior to Woods effecting variable annuity transactions. The complaint also alleges that Woods made misrepresentations relating to alternative investments including BDCs.

On January 5, 2021, a customer initiated investment related FINRA securities arbitration claim involving Woods’ conduct was settled for $170,000.00 in damages supported by accusations that the customer had been advised by Woods to purchase REITs and business development companies even though the customer intended to invest on a low-risk basis. FINRA Arbitration No. 19-02838. The claim alleges that LPL Financial failed to supervise Woods which resulted in the customer incurring losses on alternative investments and variable annuity products. The claim also alleges that Woods misrepresented information about those investments to get the customer to invest.

Woods has been fined $10,000.00 and suspended for six months from associating with any FINRA member in any capacity founded on findings that he made unsuitable recommendations concerning REITs and had circumvented LPL Financial’s policies to effect securities transactions. Letter of Acceptance Waiver and Consent No. 2018058133301 (May 6, 2020).

According to the AWC, Woods recommended investments to an 84-year-old customer without having adequate reason to believe that his recommendations were inappropriate. Woods overlooked the customer’s liquidity needs. Woods also recommended REITs for a retired couple without having any reason to believe that this was suitable given the customers’ situations. The regulator noted that Woods submitted applications making it seem like customers had more in assets than they actually had. Woods violated FINRA Rules 2010, 2111 and 4511 for these reasons.