Broker Investigation: Customer Complaints Against Zak Shapiro

shutterstock_177577832The securities lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Zak Shapiro (Shapiro).  According to BrokerCheck records Shapiro has been subject to at least four customer complaint, 11 financial disclosures, and 1 employment separation.  The customer complaints against Shapiro allege securities law violations that including unsuitable investments and unauthorized trading among other claims.

In February 2016 a customer filed a complaint alleging unsuitable investments and unauthorized trade occurred in or about September 2014.  The complaint has been denied.  Shapiro has disclosed 11 financial matters.  Substantial financial disputes on a broker’s record can reveal a financial incentive for the broker to recommend high commission products or services.  A broker’s inability to handle their personal finances has also been found to be relevant in helping investors determine if they should allow the broker to handle their finances.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client.  In order to make a suitable recommendation the broker must meet certain requirements.  Advisors are also not allowed to engage in unauthorized trading.  Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b).  These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

The number of events listed on Shapiro brokercheck is high relative to his peers.  According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records.  Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints.  In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters.  However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck.  More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.

Shapiro entered the securities industry in 1998.  From December 2009 until October 2010, Shapiro was registered with Wells Fargo Advisors, LLC.  Thereafter, Shapiro from October 2010 until June 2013 was associated with Western International Securities, Inc.  Finally, since June 2013 Shapiro has been associated with Oppenheimer & Co. Inc. out of the firm’s Los Angeles, California office location.

The investment fraud attorneys at Gana LLP represent investors who have suffered securities losses due to the mishandling of their accounts.  The majority of these claims may be brought in securities arbitration before FINRA.  Our consultations are free of charge and the firm is only compensated if you recover.