Doron Kochavi, of Pasadena, California, a stockbroker registered with Western International Securities Inc., has been fined $10,000.00 and suspended for two months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Kochavi mismarked order tickets “unsolicited.” Case No. 2021071099403 (January 16, 2024).
According to the AWC, between January of 2017 and April of 2019, Kochavi mismarked 1,586 securities transactions in a customer’s accounts as unsolicited. Unsolicited means that the customer effected these transactions on their own intiative rather than upon the recommendation of the broker, and is a common device or contrivance to avoid liability for otherwise tainted or defective investment recommendations.
Here, the regulator found that in fact the transactions were “solicited” by Kochavi.
The AWC stated that Kochavi caused Western International Securities Inc. to maintain inaccurate records and books in violation of Securities Exchange Act of 1934 Section 17(a) and Exchange Act Rule 17a-3. Consequently, the regulator found that Kochavi violated FINRA Rules 4511 and 2010.
Public Disclosure shows that Kochavi is referenced in six customer initiated investment related disputes concerning Kochavi’s conduct while associated with securities broker dealers. On December 31, 1999, a customer filed an investment related complaint involving Kochavi’s conduct in which the customer requested $60,000.00 in damages based upon allegations that Kochavi promised discounted commissions and made misrepresentations of material fact in connection with the sale of over-the-counter equities during the time that Kochavi was associated with Bear Stearns Co. Inc. The customer also alleged that Kochavi misled them regarding an investment strategy.
On September 24, 2004, a customer initiated investment related FINRA securities arbitration claim involving Kochavi’s conduct resulted in the customer being awarded $35,000.00 in compensatory damages because Kochavi was held liable for sales practice violations. FINRA Arbitration No. 03-02292. The Statement of Claim alleged unsuitable recommendations, breach of fiduciary duty, churning, unauthorized trading, and omissions of material information in connection with the sale of securities.
Kochavi is also referenced in a customer initiated investment related complaint filed on April 5, 2007, in which the customer alleged damages based upon allegations that Kochavi engaged in unsuitable trading in stocks and mutual funds. The complaint was closed on January 10, 2009.
On February 8, 2021, a different customer initiated investment related FINRA securities arbitration claim involving Kochavi’s conduct was settled for $2,800,000.00 in damages. The allegations against Kochavi included breach of fiduciary duty in connection with the sale of stocks when he was associated with Western International Securities Inc. FINRA Arbitration No. 19-03040.
On June 15, 2022, the United States Securities & Exchange Commission brought an action against Western International Securities, Inc., and several of its associated persons for among other things, the violation of Reg BI. United States Securities & Exchange Commission v. Western International Securities, Inc., Case 2:22-cv-04119 (C.D. Cal. June 6, 2022).
Kochavi was associated with Western International Securities Inc. in Pasadena, California from October 19, 2015, to January 4, 2024.
