Halil Kozi (also known as Hal Kozi) of New York New York a stockbroker formerly registered with PHX Financial Inc. has been suspended for two years from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to an Office of Hearing Officers Order Accepting Offer of Settlement containing findings that the stockbroker gave unsuitable investment advice to a PHX Financial customer. Department of Enforcement v. Halil Kozi Disciplinary Proceeding No. 2016048921102 (Mar. 17, 2020).
According to the Order, between June of 2013 and February of 2015, trades were excessively effected by Kozi in the account of a PHX Financial Inc. customer. FINRA stated that the customer invested $200,000.00 in a brokerage account held at PHX Financial which was serviced by the stockbroker. In approximately eighteen months’ time, two hundred eight options and equity transactions had been recommended by the stockbroker. The principal value of those transactions surpassed $3,000,000.00.
The trades Kozi recommended caused the customer’s account to suffer from a fifty-three percent annual cost-to-equity ratio. This necessitated the customer to generate a fifty-three percent return to avoid taking a loss. FINRA stated that the customer sustained $72,000.00 in losses because of Kozi all while the stockbroker generated more than $135,000.00 in commission. Kozi personally received $15,000.00 more in commissions than the customer suffered in losses. The Order also stated that ninety-five percent of the commissions earned by Kozi throughout that period came as a result of his trading in the customer’s account. Kozi violated FINRA Rules 2010 and 2111 for advising the customer to excessively trade.
According to the Order, one hundred three of the transactions that were recommended by Kozi had been qualitatively unsuitable. The stockbroker’s recommendations of options transactions in twenty-nine issuers failed to align with the customer’s financial situation and investment objectives. The customer had no prior experience with options. FINRA also noted that the customer’s account had been overconcentrated in a speculative security issued by a pharmaceutical company with no revenue. Kozi caused the customer at one point to allocate eighty-five percent of the account in this single security. FINRA determined that Kozi’s inappropriate advice constituted violations of FINRA Rules 2010, 2360(b)(19) and 2111.
Kozi’s registration with PHX Financial Inc. was terminated on March 2, 2016. FINRA Public Disclosure shows that Kozi has been associated with four different securities broker dealers who are defunct or have been expelled by regulators for violation of federal securities laws.
