Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Daniel King (King), currently associated with Emerson Equity LLC, has at least 2 disclosable events. These events include 2 regulatory events, alleging that King recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on January 02, 2024.
On July 17, 2023, FINRA accepted a Letter of Acceptance, Waiver, and Consent in which King, without admitting or denying them, consented to the entry of findings that he violated FINRA Rules 2111 and 2010 during the period December 2016 to February 2019 by recommending the unsuitable use of margin to effect trades in the accounts of two customers who were not sophisticated investors; that he recommended the use of margin in his customers’ accounts to leverage additional buying power while also employing a short-term trading strategy; and that his unsuitable recommendations caused the customers to pay more than $46,000 in commissions, fees, and margin interest. Such conduct constitutes unethical practices in the securities business.
FINRA BrokerCheck shows a final customer complaint on August 21, 2023.
On or about July 17, 2023, without admitting or denying the findings, King entered into an Acceptance, Waiver and Consent (“AWC”) with FINRA wherein King consented to the entry of findings that he recommended the unsuitable use of margin in the accounts of two customers, causing the accounts of those customers to pay more than $46,000 in commissions, fees, and margin interest. King also employed a strategy of frequently recommending that his customers buy securities on margin only to hold the positions for a short time before selling them, causing customers to incur realized losses in addition to trading costs and margin interest. King was suspended from FINRA in all capacities for a period of two (2) months and agreed to pay a fine in the amount of $10,000 and to pay restitution of $33,374.31 plus interest.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. This standard applies when a registered representative is providing investment advice through making recommendations customers and covers securities transaction, investment strategies, and recommendations concerning advice on opening of an account or accounts. 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 requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes 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 advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Finally, the advisor must use their knowledge of the first two elements to consider reasonably available investment option alternatives and come to the conclusion that there is a reasonable basis to believe that the recommendation or advice being provided is in the retail investor’s best interest.
An advisor must understand the type of account, securities, and their client in order to meet their care obligations. The type of securities account has the potential to greatly affect retail customers’ costs and investment returns. Different types of securities accounts can offer different features, products, or services, and not all types of accounts or services would be in every investor’s best interest.
King entered the securities industry in 2011. King has been registered as a Broker with Emerson Equity LLC since 2025.
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.