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Aegis Capital Corp Broker Gilbert Kuta Suspended After Allegations of Exercising Discretion Without Authorization

Gilbert Kuta (CRD#: 1084075) is a registered Broker at Aegis Capital Corp. in Timonium, MD. He entered the securities industry in 1982 and previously worked for Capitol Securities Management, Inc.; RBC Capital Markets Corporation; Ferris, Baker Watts, LLC; Smith Barney Shearson, Inc.; Lehman Brothers, Inc.; Painewebber Incorporated; A.G. Edwards & Sons, Inc.; Laidlaw Ansbacher Incorporated; and Merrill Lynch, Pierce, Fenner & Smith, Inc.

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in July 2021, FINRA sanctioned Gilbert Kuta, sanctioning him with civil and administrative penalties of $5,000 and suspending him from all capacities for ten business days, beginning on August 16, 2021 and ending on August 27, 2021. The FINRA sanction states, “Without admitting or denying the findings, Kuta consented to the sanctions and to the entry of findings that he exercised discretion without written authorization in customers’ accounts. The findings stated that although the customers knew that Kuta was exercising discretion in their accounts, he did not have prior written authorization to do so from any of the customers. Additionally, Kuta’s member firm had not approved any of these accounts for discretionary trading.”

For a copy of the FINRA sanction, click here.

In addition, Gilbert Kuta has been the subject of eight customer complaints, including the following:

● December 2016–”Client believes mismanagement of her account by her Rep caused significant losses.” Damages of $60,000 were requested; the customer dispute was denied.
● January 2014–”CLIENT FILED FOR ARBITRATION ON 01/14/2014. THE FIRM RECEIVED THE STATEMENT OF CLAIM ON 01/31/2014. CLIENT ALLEGED MISCONDUCT FROM THE REPRESENTATIVE SUCH AS NEGLIGENCE, EXCESSIVE COMMISSIONS, CHURNING, AND SUITABILITY. THE CLIENT REQUESTS RELIEF IN THE AMOUNT OF $91,567 (LOSS OF PRINCIPAL: $36,567; PROPOSED RATE OF RETURN: $25,000; EXCESSIVE COMMISSIONS: $30,000).” The customer dispute was settled for $22,500.
● May 2011–”FORMER CUSTOMERS CLAIM THEIR ACCOUNTS WERE TRADE EXCESSIVELY OVER THE PAST FEW YEARS. REQUEST REIMBURSEMENT FOR LOSSES.***IN ARBITRATION CLIENTS ALLEGE BROKER RECOMMENDED UNSUITABLE EQUITIES AT BOTH FBW AND RBC FROM 2006-2009.” The customer dispute was settled for $270,000.
● April 2009–”CUSTOMER ALLEGES THE MATURITIES OF THE MUNICIPAL BONDS IN HIS ACCOUNT WERE INAPPROPRIATE. SPECIFIC DAMAGES UNSPECIFIED, BUT BELIEVED TO BE IN EXCESS OF $5000.” The customer dispute was denied.
● November 2008–”CLIENTS’ SON, POWER OF ATTORNEY, ALLEGES THAT INVESTMENT EXECUTIVE ENGAGED IN UNSUITABLE INVESTMENT STRATEGIES, IMPROPER USE OF DISCRETION AND GENERATED HIGH COMMISSIONS.” Damages of $250,000 were requested. The customer dispute was denied.
● April 2007–”CLIENT ALLEGES THAT THE INVESTMENT EXECUTIVE ENGAGED IN AN UNSUITABLE INVESTMENT STRATEGY. CLIENT ALSO ALLEGES THAT THE INVESTMENT EXECUTIVE IMPROPERLY USED DISCRETION AND GENERATED HIGH COMMISSIONS.” The customer dispute was settled for $60,000.
● August 2002–”CLIENT ALLEGED MISREPRESENTATION OF A MUNICIPAL BOND. THE PURCHASES OF THE BOND WERE MADE IN AUGUST 1996 AND JUNE 1998.” Damages of $22,000 were requested. The customer dispute was denied.
● March 1994–”THE MARYLAND DIVISION OF SECURITIES ADVISED ME THAT IT WAS NOT PREPARED APPROVE MY APPLICATION FOR AGENT REGISTRATION UNLESS FERRIS, BAKER WATTS AND I AGREED TO SPECIAL SUPERVISORY PROCEDURES.” The regulatory action was initiated by the State of Maryland.
● December 1993–”N/A SMITH BARNEY SHEARSON TERMINATED MY EMPLOYMENT ON DECEMBER 29, 1993, AFTER IT BECAME AWARE THAT ON DECEMBER 28, 1993, I PERSONALLY REIMBURSED A CLIENT IN THE AMOUNT OF $1,500 FOR LOSSES IN THE CLIENT’S ACCOUNT.” Gilbert Kuta was permitted to resign from Smith Barney Shearson.
● November 1993–”**OCTOBER 16, 1995** STIPULATION AND CONSENT PENALTY FILED BY NYSE DIVISION OF ENFORCEMENT AND PENDING. WITHOUT ADMITTING OR DENYING GUILT, KUTA CONSENTS TO: a. FINDINGS THAT HE: (i) ENGAGED IN CONDUCT INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE BY EFFECTING UNAUTHORIZED TRADES IN THE ACCOUNTS OF CUSTOMERS OF HIS MEMBER ORGANIZATION EMPLOYER; AND (ii) VIOLATED RULE 352 (c) BY SHARING IN A LOSS IN THE ACCOUNT OF A CUSTOMER OF HIS MEMBER ORGANIZATION EMPLOYER. b. THE IMPOSITION BY THE EXCHANGE OF THE PENALTY OF A CENSURE AND A ONE MONTH SUSPENSION FROM MEMBERSHIP, ALLIED MEMBERSHIP, APPROVED PERSON STATUS, AND FROM EMPLOYMENT OR ASSOCIATION IN ANY CAPACITY WITH ANY MEMBER OR MEMBER ORGANIZATION.” The regulatory action was initiated by the New York Stock Exchange Division of Enforcement and resulted in a censure and suspension.
● September 1992–”CLIENT ALLEGED UNAUTHORIZED TRADING. ALLEGED DAMAGES: UNSPECIFIED.” The customer dispute was settled.

For a copy of Gilbert Kuta’s FINRA BrokerCheck, click here.

FINRA regulations require that a customer’s written authorization is required before a broker-dealer can carry out transactions in the customer’s account. In addition, the broker-dealer’s member firm needs to approve the broker-dealer’s authorization. These measures are intended to protect the customer. Discretionary trading allows the broker-dealer to unilaterally decide to buy or sell securities at any price and not have to check with the client first. Exercising discretion without authorization can be costly to investors, and broker-dealers and their member firms, too.

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at mwolper@wolperlawfirm.com.

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]