- April 26, 2020
- Worden Capital Management
David Weisberg (CRD # 5610111) was a Financial Advisor at Worden Capital Management in New York, NY. David Weisberg has been in the securities industry since 2009 and previously worked at two brokerage firms that have since been expelled from the industry by FINRA, including Legend Securities and John Thomas Financial.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on April 22, 2020, FINRA sanctioned David Weisberg, suspending him for a period of eleven months, fining him $7,500 and requiring that he disgorge $75,638 in profits. The suspension was due to David Weisberg allegedly engaging in unsuitable and excessive trading in the account of elderly customer.
According to the FINRA sanction, “Weisberg consented to the sanctions and to the entry of findings that he engaged in excessive and unsuitable trading in the account of an elderly customer. The findings stated that Weisberg began soliciting stock trades, based on tips from a certain stock-picking website and other sources. Some of Weisberg’s recommendations involved in-and-out trading and many of them used margin. The customer relied on Weisberg’s advice, accepting all of his recommendations. In virtually every case, the customer purchased or sold exactly the quantity of shares that Weisberg suggested. The customer did not make any unsolicited purchases. The costs of Weisberg’s trading in the customer’s account were significant and Weisberg did not track the trading costs or take them into consideration when making recommendations. The trading generated commissions of approximately $75,638 for Weisberg while the customer lost approximately $55,627. The findings also stated that Weisberg used discretion to initiate stock trades in customers’ accounts without written authorization and his member firm never accepted their accounts for discretionary trading.”
Excessive trading occurs when a Financial Advisor places his or her interests in front of the client and recommends transactions for the purpose of generating commissions. FINRA rules prohibit a Financial Advisor from churning or excessively trading an account. Brokerage firms are required to conduct a quantitative suitability analysis to ensure that the number of trades placed in a customer account do not render the strategy unsuitable. For example, a Financial Advisor may recommend the sale of a security at a profit. However, if the commission generated on the buy and sale of that same security exceeds the profit, the customer has actually lost money in that security. Often times, customers are unaware that the commissions charged supersede the profit associated with a transaction or series of transactions.
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2019063442701%20David%20Weisberg%20CRD%205610111%20AWC%20sl.pdf
In addition, David Weisberg has been the subject of four customer complaints during his career, alleging sales practice misconduct. The complaints allege the following:
• July 2019—”Negligence, unsuitability, breach of fiduciary duty, breach of contract, negligent misrepresentation and omissions.”
• October 2018—”Unauthorized trading and churning.”
• November 2013—”UNSUITABLE TRANSACTION, POOR ADVISE, POOR SERVICE”
• March 2016—”UNAUTHORIZED TRADES AND UNETHICAL ADVISE.”
For a copy of Paul David Weisberg’s CRD, click https://brokercheck.finra.org/individual/summary/5610111#disclosuresSection
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.
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