Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker/advisor Donald S. Woods (CRD # 727894) was recently suspended from the securities industry by FINRA’s Department of Enforcement. The sanction occurred as a result of an investigation into the falsification of customer records and unsuitable recommendations. The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Mr. Woods.
Registration Background for Donald S. Woods
Mr. Woods first became registered in the securities industry in 1981 and had most recently been registered with Louisville, KY based Thurston Springer Financial (CRD # 8478). His prior registrations include LPL Financial LLC (CRD # 6413) from July 2010 to January 2017 and Wells Fargo Advisors, LLC (CRD # 19616) from December 2008 to May 2009.
FINRA’s Allegations against Donald S. Woods
FINRA’s investigation led to Mr. Woods entering into a Letter of Acceptance, Waiver and Consent (AWC) with FINRA on May 6, 2020. According to the AWC, Mr. Woods consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- During the relevant period of June 2014 to June 2015, “[o]n two occasions, [Mr.] Woods submitted applications to purchase REITs that overstated the customer’s liquid net worth in order circumvent LPL’s restrictions”;
- “[Mr.] Woods recommended that Customer A, who was 84 years old, invest $54,000 in a REIT.
- [Mr.] Woods lacked a reasonable basis to believe that his recommendation was suitable because he did not exercise reasonable diligence to understand the potential risks and rewards of investing in the REIT”;
- “[Mr.] Woods admitted that he was not familiar with the specific REIT that he recommended to Customer A, and that he did not consider the fact that the REIT was inconsistent with Customer A’s investment profile”;
- “[Mr.] Woods also recommended that Customers B and C, who were retired and in their late 60s, invest a total of $200,000 in four REITs.
- Woods lacked a reasonable basis to believe that his recommendations were suitable because, again, he did not exercise reasonable diligence to understand the potential risks and rewards of investing in the REITs or to consider the customers’ investment profiles”;
- “[Mr.] Woods admitted that he did not consider the fact that the REITs were each illiquid and that Customers B and C had short-term liquidity needs due to ongoing health issues”; and
- “By virtue of foregoing, [Mr. Woods] violated FINRA Rule 4511, FINRA Rule 2111 and FINRA Rule 2010.”
FINRA Sanctions Donald S. Woods
As a result of such violations and in addition to the above described findings and conclusions, FINRA’s May 6, 2020 AWC also indicates that Mr. Woods consented to the following sanction:
- A suspension from association with any FINRA member firm in any and all capacities for a period of six months;
- A $10,000.00 fine; and
- Disgorgement of commissions in the amount of $5,600.70, plus interest.
Donald S. Woods has a History of Complaints
In addition to the findings of FINRA’s Department of Enforcement, FINRA BrokerCheck for Mr. Woods reveals he has a history of customer complaints including but not necessarily limited to the following:
- On January 31, 2019 a customer initiated a written complaint against Mr. Woods. The customer alleged misrepresentation and unsuitable investments in connection with an alternative investment (REIT). The complaint was settled on February 28, 2019 in the amount of $10,000.00.
- On December 11, 2018 a customer initiated a written complaint against Mr. Woods. The customer alleged misrepresentation and unsuitable investments in connection with two alternative investments. The customer alleged damages in the amount of $120,000.00. The complaint was eventually settled on July 26, 2019 in the amount of $25,374.83.
- On August 13, 2018 a customer initiated a written complaint against Mr. Woods. The customer alleged excessive selling of variable annuities, misrepresentation or failing to disclose material facts, unsuitability and alteration of account profile. The customer alleged damages in the amount of $153,554.00. The complaint was eventually settled on April 9, 2019 in the amount of $61,852.07.
- On March 22, 2018 a customer initiated a written complaint against Mr. Woods. The allegations included misrepresentation of financial information, unsuitable investments unwarranted fees and failure to invest in a timely manner. The customer alleged damages in the amount of $26,898.67. The complaint was eventually settled on July 26, 2019 in the amount of $17,500.00.
- On May 14, 2018 a customer initiated a written complaint against Mr. Woods. The customer alleged unsuitable investments, unwarranted fees, failure to invest funds. The customer alleged damages in the amount of $26,898.67. The complaint is currently pending.
- On March 15, 2018 a customer initiated a written complaint against Mr. Woods. The customer alleged misrepresentation, unsuitable investments, failure to invest in a timely manner and that documents were altered. The complaint was eventually settled on July 16, 2019 in the amount of $96,480.00.
- On February 17, 2017 a customer initiated a written complaint against Mr. Woods. The customer alleged misrepresentation. The customer alleged damages in the amount of $10,574.00. The complaint was settled on March 1, 2017 in the amount of $10,722.00.
If you or someone you know has or had a brokerage account with Mr. Donald S. Woods and have concerns regarding losses in your investments or possible sales practice violations including fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.
