Erez Law is currently investigating K.C. Ward Financial financial advisor Craig David Dima (CRD# 2314389) regarding unsuitable trading. Dima was registered with K.C. Ward Financial in Ronkonkoma, New York from 2009 to 2017. He was permanently barred by FINRA from acting as a broker or otherwise associating with firms that sell securities to the public for making unauthorized and unsuitable trades in the amount of $15 million in the account of a 73-year-old retiree, as well as for misrepresenting the reasons for the trades to his customer.
In August 2016, Dima was permanently barred from FINRA after allegations that he made 41 unauthorized sales of a Colgate-Palmolive stocks in the account of a senior citizen customer on 11 occasions. To conceal his unauthorized trading, the complaint alleges that Dima made fraudulent misrepresentations and omissions to the customer, in some cases telling the customer that his unauthorized trades were computer issues or human error. It is alleged that Dima also misrepresented to his customer that K.C. Ward would reimburse her for the fees and commissions she paid as well as $127,000 in dividend payments that she was deprived of because of those unauthorized stock sales. It is also alleged that Dima told the elderly customer that to correct the aforementioned errors on her statements, he would have to buy back the shares of the company’s stock in her account and return her account to its original share amount. Dima also sold the customer’s shares even after the customer told him not to sell the stock. These actions allowed Dima to hide his unauthorized trades and generate $372,000 in additional revenue from mark-ups and mark-downs and fees for Dima and K.C. Ward Financial.
It is alleged that Dima also made unsuitable trades in his customer’s account. In some instances, Dima sold all of a customer’s stock of a “blue chip” company that pays dividends, and then wait and repurchase the same stocks back in the customer’s account. He performed these short-term trades without reasonable basis to believe that the purchases and sales were suitable for the customer, which was inconsistent with the customer’s desire for long-term investments that generate dividends. Additionally, it is alleged that Dima made approximately 80 trades of the company’s stock and charged mark-ups or mark-downs of 3 percent or more, which were unreasonable, unfair and excessive for the customer’s needs. In these instances, the customer paid approximately 6 percent in mark-ups and mark-downs in connection with each short-term, round-trip stock transaction. In addition to charging the customer $372,000 in fees, Dima charged the elderly customer a $49 ticket charge for each trade, which totaled approximately $4,000.
In June 2016, Dima had a judgement/lien in the amount of $57,264, which he was in contact with the IRS to resolve.
In April 2001, Dima voluntarily resigned from Sterling Financial Investment Group after allegations that Dima and Paul Daly (CRD# 2970512) purchased 10,000 shares of NETA in error in a client’s account and then tried to rebill the purchase into an employee-related account with the intent to share profits with the employee whose account they rebilled.
Dima has also been the subject of five customer complaints between 1999 and 2014, according to his CRD report:
- November 2014. “Account losses covering period 2012 through May 2014. Customer claims broker pursued investment strategies that were not in line with customers needs. Broker denies all claims.” The customer sought $100,000 in damages and the case was settled for $30,000.
- August 2004. “Claimant alleges unsuitability and unauthorized trading.” The customer sought $99,0000 in damages and the case was settled for $14,999.
- February 2001. “Customer claims unauthorized use of margin.” The customer sought $11,700 in damages and the case was settled for $3,290.61.
- December 2000. “Client references several events between June and November 2000 when messes. Dima and Kimmel engaged in unauthorized trades in Vitech and Navidec. Failed to follow instructions in margin call sell outs.” The case was closed without action.
- September 1999. “8/17 sold 1000 shares of Dell and 8/24 bought 1000 shares of Customtracks. 8/31 bought 300 shares of Customtracks. Client claims that they were unauthorized.” The case was denied.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, K.C. Ward Financial may be liable for investment or other losses suffered by Dima customers.
Erez Law represents investors in the United States for claims against K.C. Ward Financial financial advisor Craig David Dima, who is alleged to make unauthorized trades in customer accounts. If you were a client of K.C. Ward Financial financial advisor Craig David Dima or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies.