FINRA Enforcement Action Pending Against Aegis Capital Corp. Broker Daniel O’Neill After Allegations of Unauthorized Trading
Daniel O’Neill (CRD#: 1358245) is a previously registered Broker at Aegis Capital Corp. in Melville, NY. He entered the securities industry in 1985 and previously worked for Ladenburg Thalmann & Co.; Maxim Group, LLC; Wachovia Securities, LLC; Oppenheimer & Co., Inc.; First Montauk Securities Corp.; Janney Montgomery Scott, LLC; First Albany Corporation; Prime Charter LTD; Bear, Stearns & Co., Inc.; Drexel Burnham Lambert Inc.; Oppenheimer & Co., Inc.; and L.F. Rothschild & Co.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in July 2021, a regulatory action initiated by FINRA is pending against Daniel O’Neill, alleging excessive and unauthorized trading. The FINRA sanction states, “O’Neill was named a respondent in a FINRA complaint alleging that he excessively and unsuitably traded one of his customer’s accounts. The complaint alleges that O’Neill exercised de facto control over the trading in the customer’s account, controlling the volume and frequency of trading, deciding what securities to buy and sell, the quantities, the price, and when each trade would occur. O’Neill also exercised control when he executed unauthorized trades in the customer’s account. The trading in the customer’s account was also excessive when measured against the annualized turnover rate and cost-to-equity ratio. O’Neill’s intentional, active trading caused the customer to incur $140,109 in costs and $147,411 in losses, while generating substantial commissions for O’Neill. O’Neill’s trading generated gross sales credits and commissions of $110,446, of which O’Neill received at least $66,000. O’Neill did not have a reasonable basis to believe that the level of trading he recommended was suitable for the customer. The complaint also alleges that O’Neill effected trades in the customer’s account without first obtaining authorization or consent for the trades from the customer.”
For a copy of the FINRA complaint, click here.
In addition, Daniel O’Neill has been the subject of two customer complaints, including one that remains pending, including the following:
● July 2021–”Representative failed to keep the firm apprised of the status of the pending enforcement investigation which resulted in the initiation of a formal enforcement proceeding against the representative. Representative named in an enforcement proceeding alleging conduct inconsistent with firm standards.” Daniel O’Neill was discharged from Aegis Capital Corp.
● February 2021–”Time frame: unspecified. Claimant alleges unsuitable investments.” The customer dispute is pending.
● September 2019–A tax judgment/lien in the amount of $4,923.92 was filed against Daniel O’Neill.
● September 2019–A tax judgment/lien in the amount of $2,008.82 was filed against Daniel O’Neill.
● December 2017–A tax judgment/lien in the amount of $6,060.07 was filed against Daniel O’Neill.
● October 2016–A tax judgment/lien in the amount of $40,864 was filed against Daniel O’Neill.
● February 2016–”TIME FRAME: MAY 2013 THROUGH JUNE 2015 ALLEGATIONS INCLUDE UNAUTHORIZED TRADES AND MISUSE OF MARGIN.” The customer dispute was settled for $12,500.
● May 2013–A civil judgment/lien in the amount of $30,000 was filed against Daniel O’Neill.
● May 2012–A tax judgment/lien in the amount of $56,151 was filed against Daniel O’Neill.
For a copy of Daniel O’Neill’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.
Excessive trading often occurs when a Financial Advisor puts his or her interests ahead of the clients and makes transactions solely for the purpose of generating commissions. Financial Advisors have a regulatory duty to recommend suitable investment strategies. One of the components of the suitability analysis is quantitative suitability.
Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No 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.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
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 firstname.lastname@example.org.