• December 10, 2023
• Laidlaw & Co.

Richard G. Michalski (CRD#: 4588706) is a registered broker for LaidLaw & Company (UK) Ltd., in New York, NY.

Broker’s Background

Richard Michalski entered the securities industry in 2002 and previously worked for Kuhns Brothers Securities Corporation; Casimir Capital L.P; and Aegis Capital Corp.

Allegations of Misconduct

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in November 2023, the Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, against Richard Michalski (“Michalski”) and Michael Murray (“Murray”) (together, “Respondents”). In anticipation of the institution of these proceedings, Respondents have submitted Offers of Settlement (the “Offers”) which the Commission has determined to accept. The commission finds that during the period of July 2020 through October 2021 (the “Reg. BI Period”), Respondents violated Exchange Act Rule 15l-1(a)(2)(ii), the Regulation Best Interest (“Reg. BI”) Care Obligation, when they made a series of recommendations to four retail customers without a reasonable basis to believe that the series of recommended transactions were not excessive when taken together in light of the retail customer’s investment profile, and because the series of recommended transactions placed the financial interest of the registered representatives ahead of the interest of the retail customer (the “quantitative prong” of the Care Obligation).

As a result of the conduct described above, Respondents willfully violated Exchange Act Rules 15l-1(a)(2)(ii)(C) and 15l-1(a)(1). Accordingly, it is hereby ordered that Michalski cease and desist from committing or causing any violations and any future violations of Exchange Act Rules 15l-1(a)(1) and (2), is censured, and suspended from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization (NRSRO) for six (6) months. Michalski is ordered to pay disgorgement of $88,506.00 and prejudgment interest of $4,260.55, and a civil monetary penalty of $44,253.

In addition, Richard Michalski was the subject of one other customer dispute, which includes:

December 2008—“ CASIMIR STATED; [CUSTOMERS] OPENED THEIR ACCOUNT WITH CASIMIR ON NOVEMBER 5, 2007, AND [OTHER FIRM EMPLOYEE], RICHARD MICHALSKI AND [OTHER FIRM EMPLOYEE] SERVED AS THE PRIMARY REGISTERED REPRESENTATIVES FOR THEIR ACCOUNT. AFTER THE REGISTERED REPRESENTATIVES LEFT CASIMIR, THE ACCOUNT WAS ASSIGNED TO [OTHER FIRM EMPLOYEE] AND [OTHER FIRM EMPLOYEE]. AFTER [OTHER FIRM EMPPLOYEE] LEFT CASIMIR, HE CONTACTED [CUSTOMER] TO ASK HIM TO TRANSFER THE ACCOUNT. [CUSTOMER] INDICATED THAT HE BELIEVED HE WAS ENTITLED AN ADJUSTMENT BASED UPON THE VOLUME OF TRADING. THEREAFTER, CASIMIR CONTACTED [CUSTOMER] TO DISCUSS THE ACCOUNT. IN THAT CONVERSATION [CUSTOMER] CONFIRMED THAT HE HAD AUTHORIZED ALL OF THE ACTIVITY IN HIS ACCOUNT AND THAT HE FULLY UNDERSTOOD THE RISKS ASSOCIATED WITH HIS CHOSEN INVESTMENT STRATEGY. HOWEVER, HE INDICATED THAT HE WAS ENTITLED TO DISCOUNTED COMMISSIONS BASED UPON THE VOLUME OF TRADING. ULTIMATELY, THE FIRM AGREED TO MAKE AN ADJUSTMENT TO ACCOMMODATE THE CLIENT’S REQUEST.” The damage amount requested was $35,000 and the customer dispute was settled for $35,000.

For a copy of Richard Michalski’s FINRA BrokerCheck, click here.

 

We Help Investors Recover Investment Losses

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 mwolper@wolperlawfirm.com.