David Richard Shapiro, of New York, New York, a stockbroker currently registered with Stifel, Nicolaus & Company, Incorporated, has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he effected unauthorized trades in a customer account. Letter of Acceptance, Waiver and Consent, No. 2015047365001 (Dec. 2, 2016).
According to the AWC, in December of 2012, Shapiro and a firm customer engaged in discussions for the customer to transfer assets to Stifel Nicolaus in order to pursue an investment strategy. The AWC stated that the customer’s account was eventually taken over by Shapiro. Subsequently, in March of 2013, Shaprio reportedly began to effect transactions based upon the strategy which had been discussed with the customer.
The AWC revealed that in 2014, discretion had been exercised by Shapiro in the customer’s account, leading Shapiro to effect eighty trades pursuant to the investment strategy. However, the customer reportedly never provided Shapiro with written approval for such trades to be effected. Further, the firm did not deem the customer’s account to be approved for discretionary trading by Shapiro.
FINRA found that Shapiro’s conduct of trading on a discretionary basis pursuant to the investment strategy did not eliminate the requirement for Shapiro to gain the customer’s and the firm’s requisite written approval. As such, Shapiro was found to have violated FINRA Rule 2010 as well as NASD Rule 2510(b).
FINRA Public Disclosure reveals that Shapiro has been subject to four customer initiated investment related arbitration actions. Particularly, on July 1, 1990, a customer initiated investment related arbitration action involving Shapiro’s conduct was settled for $90,000.00 in damages based upon allegations that Shaprio effected unsuitable transactions in the customer’s account.
On December 30, 1998, a customer was awarded $54,381.70 per an investment related arbitration claim involving Shapiro’s conduct, based upon allegations that Shapiro made misrepresentations to the customer concerning investments, effected trades in the customer’s account which were not suitable, and failed to follow the customer’s investment instructions.
Further, on April 5, 2001, a customer initiated investment related arbitration action involving Shapiro’s conduct was settled for $14,227.72 in damages based upon allegations that Shaprio did not follow the customer’s instructions concerning bond investments. Finally, on July 22, 2015, a customer initiated investment related arbitration claim regarding Shapiro’s actions was settled for $30,000.00 in damages based upon allegations that Shapiro effected trades in the customer’s account on an excessive and unauthorized basis.
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