Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Douglas Studer (Studer) formerly associated with Kovack Securities Inc. (Kovack) alleging unauthorized trading among other claims. According to brokercheck records Studer has been subject to two customer complaints, one bankruptcy in 2010, and one regulatory sanction resulting in a permanent bar from the securities industry.
In September 2016 FINRA sanctioned Studer alleging that he consented to the entry of findings that he refused to appear for testimony concerning an investigation into whether he had violated his employing member firm’s policy by being named in an elderly customer’s estate documents to inherit the customer’s waterfront condominium.
Brokers in the financial industry have the fundamental responsibility to treat investors fairly. This obligation includes making only suitable investments for their client. The suitable analysis has certain requirements that must be met before the recommendation is made. First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives. These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.
Studer entered the securities industry in 2001. From September 2007 through March 2009, Studer was registered with VSR Financial Services, Inc. From March 2009 through November 2013, Studer was associated with Prime Capital Services, Inc. Then from November 2013 until November 2015, Studer was associated with National Securities Corporation. Finally, from October 2015 until July 2016 Studer was associated with Kovack out of the firm’s Fort Lauderdale, Florida office location.
The number of events listed on DiGaetano 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. In addition, Kovack Securities brokers have been found to be extremely dangerous for investors to trust with their money. According to a recent study conducted by the Securities Litigation and Consulting Group entitled “How Widespread and Predictable is Stock Broker Misconduct?” the incidents of investor harm at Kovack Securities is extraordinarily high. The study ranked Kovack Securities as the sixth worst brokerage firm finding that brokers at the firm had over a 28% misconduct rate. The study stated that investors should stay away from Kovack Securities “Given their coworkers’ disclosure record as of 2014, 83.7% of the brokers at these six firms would be in the highest risk quintile as defined in the FINRA study and should be avoided by investors. The BrokerCheck reports for most of the brokers at these six firms should prominently display a skull and crossbones warning.”
Gana Weinstein LLP’s securities fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts due to claims of fraud and negligence. 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.