Former Ditto Trade, Inc. Client Wins FINRA Arbitration for $125,000 for Losses Due to Investments in Ditto Holdings
Posted on Wednesday, May 9th, 2018 at 3:02 pm
In April 2018, a former client of Ditto Trade, Inc. won an award in a FINRA arbitration for compensatory damages for $125,000 for losses sustained from investments in Ditto Holdings. The investors were clients of financial advisor Yosef Fox (Joseph Fox) (CRD# 2386001).
The causes of action included failure to disclose; violations of FINRA and SEC rules; failure to file timely audited financials; negligence; and failure to conduct proper accounting. The causes of action relate to Claimant’s investment in Ditto Holdings. The FINRA arbitration hearing was conducted in Denver, Colorado.
Fox was registered with Ditto Trade, Inc. in Chicago, Illinois from 2010 to 2014. FINRA expelled the firm in March 2016.
In August 2016, Fox was barred by FINRA after he failed to respond to FINRA request for information.
In September 2015, the Securities and Exchange Commission initiated cease-and-desist proceedings against Fox, barred him from acting as a broker, and sanctioned him to $75,000 in civil and administrative penalties and fines, $125,210 in disgorgement, and $5,426 in monetary fines. According to the SEC complaint, Fox discussed selling some of his shares of Ditto Holdings common stock with an individual and whether any of the individual’s newsletter subscribers would be interested in purchasing shares. Fox then provided the individual with a stock purchase agreement, which included instructions for how to wire investment funds to Fox, and told the individual that the stock purchase agreement was the only document interested purchasers would need to complete. Between April and July 2013, 28 individuals purchased 1.21 million shares of stock from Fox at a total cost of $1.25 million. Fox paid the individual $124,000 in three installments during this time (10% of the total sales). Neither Fox nor anyone acting on behalf took steps to determine whether any of the individuals who purchased fox’s shares of Ditto Holdings stock were sophisticated investors. Additionally, investors did not have access to financial statements or other required information about Ditto Holdings in connection with Fox’s sales.
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, Ditto Trade, Inc. may be liable for investment or other losses suffered by Fox’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.