Richard S. Siminou of New York, New York, a stockbroker previously associated with Newbridge Securities Corporation, has been fined $5,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Siminou engaged in excessive and unsuitable trading during the time that he was associated with Newbridge Securities Corporation. Letter of Acceptance, Waiver, and Consent No. 2019064511205 (August 31, 2023).
According to the AWC, Between January 2017 and December 2018, while he was registered through Newbridge, Siminou engaged in excessive and unsuitable trading in the accounts of Customer A and Customer B. Between January 2017 and January 2018, Siminou engaged in excessive and unsuitable trading in the account of Customer A.
At the start of the relevant period, Customer A was a 68-year-old resident of the United Kingdom. During the relevant period, Customer A routinely followed Siminou’s recommendations. Although Customer A’s account had an average month-end equity of approximately $40,800 for 12 months, Siminou recommended purchases with a total principal value of approximately $351,000, which resulted in an annualized turnover rate in the account over 8.
This trading resulted in an annualized cost-to-equity ratio over 29 percent—meaning Customer A’s investments had to grow by more than 29 percent just to break even. As a result of Siminou’s unsuitable recommendations, Customer A paid $11,875 in commissions and fees.
The AWC also states that between January 2018 and December 2018, Siminou engaged in excessive and unsuitable trading in the account of Customer B. At the start of the relevant period, Customer B was a 64-year-old resident of Finland.
During the relevant period, Customer B routinely followed Siminou’s recommendations. Although Customer B’s account had an average month-end equity of approximately $15,000 for 12 months, Siminou recommended purchases with a total principal value of approximately $157,000, which resulted in an annualized turnover rate in the account over 10.
This trading resulted in an annualized cost-to-equity ratio over 34 percent—meaning Customer B’s investments had to grow by more than 34 percent just to break even. As a result of Siminou’s unsuitable recommendations, Customer B paid $5,146 in commissions and fees. Siminou’s recommended securities transactions in the accounts of Customers A and B were excessive and unsuitable.
Therefore, according to the AWC, Siminou violated FINRA Rules 2111 and 2010.
FINRA Rule 2111(a) requires in pertinent part that member firms and their associated persons “must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile.” FINRA Rule 2111 Supplementary Material .05 (Rule 2111.05) defines the “quantitative suitability” obligation, which requires a member or associated person who has actual or de facto control over trading in a customer account “to have a reasonable basis for believing that a series of recommended transactions, even if suitable when viewed in isolation, are not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile.”
Rule 2111.05(c) states that “[n]o single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated
the quantitative suitability obligation.” Turnover rate represents the number of times that a portfolio of securities in an account is exchanged for another portfolio of securities. The cost-to-equity ratio measures the percentage return on the customer’s average net equity
needed to cover commissions and other expenses. In other words, it is the break-even point where a customer may begin to see a return. A turnover rate of six or a cost-toequity ratio above 20 percent generally indicates that an account has been excessively traded.
FINRA Rule 2010 requires that all members, in the conduct of their business, “shall observe high standards of commercial honor and just and equitable principles of trade.”
Under the terms of the AWC, without admitting or denying FINRA’s findings, Siminou expressly agreed that he “may not take any action or make or permit to be made any public statement, including in regulatory filings or otherwise, denying, directly or indirectly, any finding in this AWC or create the impression that the AWC is without factual basis.
On September 18, 2023, the Securities Division of the State of Maryland, after initiallly revoking Siminou’s registration, Siminou agreed to pay and to not reapply as a broker-dealer, agent, investment adviser or investment adviser representative in Maryland. In re: Richard Siminou, Docket No. 2023-0260 (Sept. 2023).
FINRA Public Disclosure also shows that on November 10, 2016, a customer filed an investment related complaint involving Siminou’s conduct in which the customer requested $12,000.00 in damages based upon allegations that Siminou mismanaged the customer’s account and caused the customer to experience poor performance on stocks and equities during the time that Siminou was associated with Newbridge Securities Corporation. The complaint was closed with no action on November 14, 2018.
Siminou was also referenced in a customer initiated investment related FINRA securities arbitration claim that was settled for $37,500.00 in damages based upon allegations that Siminou made unsuitable investment recommendations, failed to perform due diligence, lacked supervision, and showed negligence in connection with the sale of alternative investments during the time that Siminou was associated with Newbridge Securities Corporation. FINRA Arbitration No. 22-00102 (April 25, 2023).
Siminou has been associated with Kingswood Capital Partners LLC in New York, New York since from March 9, 2021, conducting business under the name Siminou Wealth Management. Although FINRA Public Disclosure shows that Siminou conducts business at 126 E 56 Street, Suite 301, New York, NY 10022, Siminou Wealth Management is located at 2 Grenwolde Drive, Kings Point, NY 11024
Prior to his assocation with Kingswood Capital Partners, Siminou was associated with Benchmark Investments LLC in New York, New York from February 20, 2019, to July 28, 2023, and Newbridge Securities Corporation in New York, New York from November 13, 2008, to February 21, 2019.
The information contained herein has been obtained from reliable sources however may not be accurate and is not guaranteed by us. Readers are encouraged to undertake their own independent investigation and evaluation of the relevant facts. All claims and allegations are subject to adjudication, decisions may be subject to appeal, and no inference is intended, nor should any inference be made from any information contained herein from any source.
