According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker David Miller (Miller), previously associated with Peachcap Securities, INC., has at least 4 disclosable events. These events include 2 customer complaints, 2 regulatory events, alleging that Miller recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on July 27, 2023.
Without admitting or denying the findings, Miller consented to the sanction and to the entry of findings that he refused to appear for on-the-record testimony requested by FINRA in connection with its investigation into the suitability of Miller’s investment recommendations.
FINRA BrokerCheck shows a final customer complaint on December 22, 2021.
The Securities and Exchange Commission (\\u201cCommission\\u201d) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 1933 (\\u201cSecurities Act\\u201d), Section 15(b) of the Securities Exchange Act of 1934 (\\u201cExchange Act\\u201d), Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940 (\\u201cAdvisers Act\\u201d), and Section 9(b) of the Investment Company Act of 1940 (\\u201cInvestment Company Act\\u201d) against PeachCap Tax & Advisory, LLC (\\u201cPCTA\\u201d) and David H. Miller (\\u201cMiller\\u201d) (collectively, \\u201cRespondents\\u201d). \, The Commission finds that these proceedings arise from violations of the federal securities laws by Miller and his SEC-registered investment advisory firm, PCTA. \, First, between May 2016 and October 2016, Miller offered and sold to certain of his advisory clients and others over $4.6 million in limited partnership interests in The Pessego Long Short Fund, LP (the \\u201cFund\\u201d), a hedge fund formed by Miller in April 2016. The Fund\\u2019s offering documents and other materials provided to prospective investors claimed that the Fund sought to \\u201cgenerate attractive risk-adjusted returns across all market environments while preserving capital,\\u201d and that the Fund \\u201cutilize[d] a fundamental long/short equity approach that targets a low net exposure as its principal investment strategy.\\u201d In reality, however, the Fund engaged in risky trading from the outset that was inconsistent with its stated objectives and strategies. Moreover, in soliciting investors, Miller recommended the Fund to certain PCTA advisory clients, including some clients for whom the Fund was an unsuitable investment. The Fund, which began trading in May 2016, lost more than 90 percent of its value before closing in December 2017. \, Second, between May 2017 and June 2018, PCTA engaged in 492 principal trades with 6 advisory clients without providing the requisite transaction-specific notice or obtaining consent. PCTA also did not adopt and implement written compliance policies and procedures reasonably designed to prevent violations of the federal securities laws in connection with these principal trades. \, Finally, PCTA did not adopt written compliance policies and procedures regarding volatility-linked exchange-traded products, which resulted in PCTA\\u2019s investment adviser representatives (\\u201cIARs\\u201d) using their discretionary authority over client accounts to buy and hold a complex leveraged exchange traded fund (\\u201cLeveraged ETF\\u201d) for retail clients for time periods that were inconsistent with the purpose of the product as described in its offering materials, subjecting its clients to unreasonable risk of loss. \,
FINRA BrokerCheck shows a pending customer complaint with a damage request of $5,001.00 on April 29, 2021.
Breach of fiduciary duty
FINRA BrokerCheck shows a settled customer complaint on July 20, 2020.
Claimants allege an unsuitable investment strategy beginning in 2011.
Financial Advisors providing advice to retail investors are required to adhere to the SEC’s Regulation Best Interest (Reg BI). Reg BI applies a ‘best interest’ standard for broker-dealers and their associated people. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. This Reg BI standard of care applies to registered representatives making recommendations to customers in the purchase, sale, or exchange of securities or the implementation of investment strategies involving securities and non-securities. The rule also applies to the handling of opening accounts such as account transfers and types of accounts being recommended to be opened.
Another aspect of the care obligation is focusing on the client’s specific needs which brokers must reasonably understand through obtaining information for the client’s investment profile. In completing a customer’s investment profile the advisor should include information such as the investor’s investment time horizon; liquidity needs; risk tolerance; experience with various investment vehicles; investment objectives and financial goals; assets and debts including outside investment accounts; marital status; tax information; age; and other relevant information that may be individual to the investor that the advisor would need to know to properly render advice or provide services. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest. There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which require brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations include three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions.
Next, the broker must understand the investor’s investment background and profile. A customer’s profile includes information that describes the investor’s financial situation and needs. Information here will include their outside securities accounts and investments; relevant assets and debts; tax bracket; age; liquidity needs; risk tolerance; investment time horizon; experience with investing; investment objectives; and any other relevant information that the investor may choose to disclose pertinent to their situation. Using the foregoing information, the associated person then must consider reasonably available investment option to accomplish the investor’s goals as well as alternative investment options that may be cheaper or other important qualities. Finally, the advisor must conclude that there is a reasonable basis to believe that the recommendation being provided is in the investor’s best interest. In addition to specific investments being recommended, under Reg BI, a broker must also understand the type of account that their client would need in order to meet their care obligations. The SEC has stated that the type of securities account an investor has can greatly affect a customers’ costs and overall investment returns. Further, different account types can offer and support different features, products, securities, or services, and account type would not be appropriately applied in a one size fits all manner.
Miller has been in the securities industry for more than 18 years. Miller has been registered as a Broker with Peachcap Securities, INC. since 2015.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.