Newport Securities Corporation Broker, Dustin Shafer, Barred By FINRA
Dustin Shafer (CRD # 4198962) was a Financial Advisor at Newbridge Securities Corporation in Springfield, IL. Dustin Shafer was been in the securities industry since 2000 and previously worked at Money Concepts Advisory Service, Money Concepts Capital Corp., and Chase Investment Services Corp.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on January 7, 2021, Dustin Shafer was barred by FINRA for failing to cooperate with an investigation into allegations that he improperly borrowed money from a customer.
For a copy of the FINRA Sanction, click here
In addition, Dustin Shafer has been the subject of eight (8) customer complaints, alleging sales practice misconduct. Among the complaints, include the following:
• October 2020—”Customer alleges she was not informed of the suitability standards or illiquidity of her investment. Firm reviewed information provided by the customer as well as documentation and disclosures in connection with her investments. Firm found the customer acknowledged the financial information provided to the RR and firm was accurate and that she understood the nature of her investments, including but not limited to the risks, costs and illiquidity.” The claim was denied.
• June 2020—”Clients are alleging unsuitable investment recommendations, misrepresentation and omission, violation of Illinois Securities Law and Regulations of 1953, violation of the Illinois Consumer Fraud & Deceptive Practices Act, Breach of Fiduciary Duty, violation of FINRA Rule 3110, negligence and breach of contract.” The matter settled for $280,000.
• January 2020—”CUSTOMER ALLEGES THE INVESTMENT WAS NOT EXPLAINED AND THAT HE WAS GUARANTEED A MONTHY DIVIDEND. CUSTOMER ALSO ALLEGES LOSSES DUE TO A DEVALUATION OF THE OFFERING.” Alleged damages are $175,000 and the matter remains pending.
• January 2020—”CUSTOMER PURCHASED ALTERNATIVE INVESTMENTS BEGINNING 2013 AND IS ALLEGING THESE WERE MISREPRESENTED. STATEMENT OF CLAIM ALLEGES VIOLATION OF ILLINOIS SECURITIES LAWS, BREACH OF FIDUCIARY DUTY, NEGLIGENCE AND VIOLATION OF FINRA RULES.” Alleged damages are $454,000 and the matter remains pending.
• September 2019—”CUSTOMER ALLEGES RR DID NOT DISCLOSE THE INVESTMEN WAS ILLIQUID AND COULD NOT BE SOLD. CUSTOMER ALSO ALLEGES RR PLACED A LARGE PORTION OF HIS NET WORTH INTO THE REIT.” The claim was denied.
• September 2019—”CUSTOMER ALLEGES 2014 INVESTMENT WAS NOT SUITABLE AND WAS NOT INFORMED IT WAS ILLIQUID.” The claim was denied.
• May 2019—”Customer alleges her account dropped in value by $26,583 in July 2018 and her requests for an explanation from the Registered Representative have gone unanswered. Firm learned the drop in value was due to the listing of a non-traded REIT. The newly-listed, now public shares were valued at a lower price than the non-traded REIT.” The matter was closed without action.
• April 2017—”Customer’s daughter alleges RR recommended bad investment and is stalling on redeeming her father’s account.” The matter was closed without action.
• June 2007—”CLIENT ALLEGES FAILURE TO DISCLOSE SURRENDER CHARGES AND TAX CONSEQUENCES IN CONNECTION WITH THE SURRENDER OF A FIXED ANNUITY AND REINVESTMENT IN A MANAGED ACCOUNT.” The claim was denied.
In addition to the customer complaints, Dustin Shafer has been the subject of numerous tax liens and judgment liens during his career.
Dustin Shafer is currently the subject of a pending investigation initiated by the state fo Illinois, Illinois Securities Department. Dustin Shafer allegedly “BORROWED OVER $55,000 FROM ONE OF HIS ELDERLY CLIENTS, AN ILLINOIS RSIDENT, IN VIOLATION OF SECTIONS 8.E(1)(c), 8.E(1)(m) AND 12.F OF THE ILLINOIS SECURITIES LAW OF 1953.”
On November 14, 2020 Newbridge Securities Corporation discharged Dustin Shafer following allegations that he “borrowed money from an existing client without firm pre-approval, in contradiction of firm policies.”
For a copy of Dustin Shafer’s CRD, click here
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.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
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.
Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s:
• Other investments
• Financial situation and needs
• Tax status
• Investment objectives
• Time horizon
• Liquidity needs
• Risk tolerance
• Any other information disclosed by the customer
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.
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