It was reported by Reuters on August 20, 2016 that the Financial Industry Regulatory Authority (FINRA) filed a complaint against a broker alleging that they broker engaged in unauthorized trading in the account of a senior aged investor.
According to the Reuters Article, the investor was a 72 years old retiree, and the broker, Craig Dima allegedly charged $376,000 in fees and commissions after making repeated unauthorized trades of the investor’s blue-chip Colgate-Palmolive Co. stock. The Reuters article further detailed that the inappropriate trading costed the client a further $127,000 in lost dividend payments, as well as a further $72,000 in losses when the broker sold the stock and then purchased it back later at a higher price. According to the Reuter’s article, the trading in the client’s account made up about 80% of Mr. Dima’s annual commissions.
Mr. Dima is currently employed and registered with the brokerage firm K.C. Ward Financial, out of Ronkonkoma, New York, and has been registered there since September 2009, according to his publicly available BrokerCheck report. Prior to working at K.C. Ward Financial, he was registered with American Capital Partners, LLC from November 2008 to December 2009, Andrew Garrett, Inc. from November 2004 to November 2008 and L.H. Ross & Company, Inc. from May 2003 to December 2004, according to Mr. Dima’s BrokerCheck records.
According to his BrokerCheck report, Mr. Dima was previously censured and fined by the National Association of Securities Dealers, Inc. (NASD) for failing to disclose a conviction on his Form U4, and has been the subject of several customer complaints, including a customer dispute where it was alleged that Mr. Dima allegedly pursued investment strategies that were not in line with customers needs for damages stated of $100,000.
Mr. Dima’s BrokerCheck report detailed that he was permitted to resign from Meyers Pollock Robbins, Inc. for allegedly transacting securities business within proper registration, and voluntarily resigned from Sterling Financial Investment Group, both prior employers.
Brokerage firms like K.C. Ward Financial are required by securities laws and industry rules to adequately supervise all representatives who are registered through their firm. Brokerage firms also must take steps to ensure that their financial advisors follow all securities rules and regulations, as well as internal firm policies.