Douglas Jarrett Rosenberg, of Hauppauge, New York, a stockbroker currently registered with Joseph Stone Capital LLC, has been suspended for seven months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings of Rosenberg making unsuitable and excessive trades in the accounts of three Joseph Stone Capital customers. Letter of Acceptance, Waiver, and Consent No. 2019063821605 (December 1, 2021).
According to the AWC, from June of 2017 to January of 2019, excessive and unsuitable trades were made by Rosenberg in Customer A’s account. The customer went along with Rosenberg’s recommendations to make 47 trades. FINRA states that the average month-end equity in the customer’s account was $12,077.00, but Rosenberg advised the customer to effect trades with a principal value of $597,236.00. The customer’s account had an annualized turnover rate of more than 16. The annualized cost-to-equity in the customer’s account was 94 percent, given margin interest, trading costs, and commissions. The customer’s account had realized losses of $12,000.00 because of Rosenberg’s bad advice.
The AWC states that from December of 2017 to March of 2020, Customer B’s account was excessively and unsuitably traded by Rosenberg. The AWC states that 96 trades were made in the customer’s account. The average month-end equity in this account was $51,697.00. Trades contained a principal value of $2,723,600.00. This caused the customer’s account to have an annualized turnover rate exceeding 11. Customer B was required to pay $57,494.00 in trading costs, commissions, and margin interest. Their account had a cost-to-equity ratio of 49 percent. Rosenberg’s unsuitable recommendations resulted in $100,000.00 in realized losses for the customer.
From February of 2019 to May of 2020, Customer C’s account contained 42 trades because of Rosenberg. This resulted in an annualized turnover rate exceeding 13 and an annualized cost-to-equity ratio exceeding 70 percent. Rosenberg’s recommendations resulted in realized losses of $42,000.00 for the customer.
Rosenberg violated FINRA Rules 2010 and 2111 for giving unsuitable investment recommendations to customers.
Rosenberg has been identified in four customer initiated investment related disputes concerning accusations of his wrongful activities when he was employed by securities broker dealers, including First Midwest Securities Inc. and Newbridge Securities Corp. FINRA Public Disclosure shows that a customer filed an investment related complaint regarding Rosenberg’s conduct in which the customer requested $30,000.00 in damages supported by allegations of misrepresentation and unauthorized trading by Rosenberg when he was registered with Newbridge Securities Corporation.
Rosenberg is referenced in another customer initiated investment related written complaint which was resolved for $17,500.00 in damages founded on accusations of Rosenberg’s unauthorized trading of over-the-counter equities in the customer’s Newbridge Securities Corp account.
Rosenberg is also the subject of a customer initiated investment related FINRA securities arbitration claim where the customer was awarded $236,403.00 in compensatory damages based on First Midwest Securities being found liable on the customer’s causes of action, including mismanagement of the investment account through using leverage and margin, churning, and investing in speculative call options, resulting in the customer’s life savings being depleted.
Another customer initiated investment related FINRA securities arbitration claim involving Rosenberg’s activities was settled for $25,000.00 in damages based upon allegations of misrepresentation, breach of fiduciary duty, failure to supervise, excessive trading, misleading and false statements, and fraud relating to exchange-traded fund trades through Rosenberg at First Midwest Securities Inc.
Rosenberg has been registered with Joseph Stone Capital since November 15, 2013.
