Former UBS Financial Services Inc. Broker David Fagenson Accused of Discretionary Trading

Posted on Wednesday, September 11th, 2019 at 8:49 pm    

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Were you the victim of former UBS Financial Services Inc. broker David Fagenson (CRD# 1652012)?

Fagenson has been registered with Newbridge Securities Corporation in Boca Raton, Florida since December 2016. Previously, he was registered with UBS Financial Services Inc. in Palm Beach, Florida from 2010 to 2016, when he was terminated regarding, “The Financial Advisor was discharged after a review found that while on heightened supervision, he violated firm policy by exercising time and price discretion, texting with clients and engaging in short term trading of preferred shares.”

In December 2018, Fagenson was barred by FINRA for eight months after he consented to the sanction and to the entry of findings that he engaged in quantitatively unsuitable trading in the accounts of three senior customers. According to FINRA, “The findings stated that Fagenson recommended the trading in these senior customers’ accounts and they followed such recommendations. The customers did not propose any trades of their own. As a result, Fagenson exercised de facto control over these customers’ brokerage accounts. During the period, one senior customer’s brokerage account lost approximately $283,314, while generating more than $260,000 in commissions and markups for Fagenson and his member firm. Furthermore, the other two senior customers’ brokerage account lost approximately $239,000, while generating more than $210,000 in commissions and markups for Fagenson and the firm. Fagenson’s trading in the accounts of these customers was excessive and unsuitable given the customers’ investment profiles, including their ages and risk tolerances.” The suspension was lifted in August 2019.

In October 2018, FINRA suspended Fagenson after he failed to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance.

In April 2011, the Florida Office of Financial Regulation revoked Fagenson following allegations that he omitted part of a law enforcement record that was required to be disclosed.

Fagenson has been the subject of 11 customer complaints between 1994 and 2018, according to his CRD report. Recent complaints are regarding:

October 2018. “August 15, 2012 to September 27, 2016 the client alleges he was promised a certain rate on his fees in a discretionary account was completely overcharged.” The customer is seeking $100,000 in damages.

September 2016. “Time frame: 2013 to 2016 client alleges that unauthorized trades were made in his account and that he gave instructions to place stop-loss orders on several investments that were not entered.” The customer is seeking $85,000 and the case is currently pending.

December 2012. “The customer alleges unsuitable investment recommendations,unauthorized trading and misrepresentation and omission of material facts from 2007 to 2010.” The case was settled for $35,000.

October 2011. “The customer alleges misrepresentation, unauthorized trading, excessive trading and unsuitable investment recommendations from July 2004 to September 2010.” The customer sought $3,300,000 in damages and the case was settled for $112,500.

June 2011. “Claimant alleges misrepresentations of fees and risk of investments, excessive trading and unsuitable investment recommendations from September 2010 to May 2011.” The customer sought $3,300,000 in damages and the case was settled for $20,000.

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, UBS Financial Services Inc. may be liable for investment or other losses suffered by Fagenson’s customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.