Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker, Douglas Edward Szempruch (CRD # 4159318) was recently suspended from the securities industry by FINRA’s Department of Enforcement after an investigation into him engaging in churning and unauthorized discretion in customer accounts.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Mr. Szempruch.
Registration Background for Douglas Szempruch
Mr. Szempruch first became registered in the securities industry in 2000. He was most recently registered with New York, NY based Aegis Capital Corp. (CRD # 15007) from June 2011 to June 2021. His previous registrations include Global Arena Capital Corp (CRD # 16871) from November 2010 to June 2011 and Prestige Financial Center, Inc. (CRD # 30407) from March 2007 to November 2010.
FINRA’s Allegations Against Douglas Szempruch
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated July 9, 2021, Mr. Szempruch consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “Between August 2014 and June 2017, while associated with Aegis, [Mr.] Szempruch: (1) recommended and effected excessive and unsuitable trades in six customer accounts: (2) exercised discretionary authority without prior written authorization to effect trades in seven customer accounts, and (3) sent email communications containing misleading statements about an investment opportunity from his firm-approved email account”;
- “Between August 2014 and September 2016, [Mr.] Szempruch engaged in quantitatively unsuitable trading in six customer accounts. Each customer had an investment objective of growth (five customers) or balanced growth (one customer) and a risk tolerance of moderate. [Mr.] Szempruch recommended the trading in the six customers’ accounts and the customers routinely followed his recommendations”;
- “Between August 2014 and October 2016, [Mr.] Szempruch exercised discretion to effect 578 trades in seven customers’ accounts without prior written authorization”;
- “None of the seven customers provided written authorization for [Mr.] Szempruch to exercise discretion in their accounts and Aegis did not accept any of the seven accounts as discretionary accounts”;
- “Between May 2017 and June 2017. [Mr.] Szempruch sent the same or similar email to 34 prospective customers. making misleading statements concerning investments in Company A. Specifically. [Mr.] Szempruch inaccurately represented that he: (1) had visited Company A’s production facility: (2) had met with and was in direct communication with Company A’s management; (3) was participating in weekly calls with Company A’s management, and (4) had first-hand information about Company”; and
- By virtue of his actions, Mr. Szempruch violated FINRA Rule 2111, regarding suitability; FINRA Rule 2010, regarding standards of commercial honor and principles of trade; NASD Rule 2510(b), regarding discretionary accounts; and FINRA Rule 2210, regarding communications with the public.
FINRA Sanctions Douglas Szempruch
As a result of such violations and in addition to the above described findings and conclusions, FINRA’s July 9, 2021 AWC also indicates that Mr. Szempruch consented to the following sanction(s):
- A 12-month suspension from association with any FINRA member in all capacities; and
- A fine in the amount of $99,720.87.
Douglas Szempruch Has A History of Securities Industry Customer Complaints
In addition to the July 9, 2021 AWC showing Douglas Szempruch being suspended from the securities industry by FINRA for churning and unauthorized discretion, FINRA BrokerCheck for Mr. Szempruch reveals he has a history of customer complaints and/or customer initiated arbitrations, including but not necessarily limited to the following:
- On February 28, 2018, a customer initiated an oral complaint regarding alleged actions that occurred while Mr. Szempruch was associated with Aegis Capital Corp. The customer alleged unsuitability. The customer further alleged damages of $30,000.00. On March 29, 2018 the complaint was settled in the amount of $30,000.00.
- On May 28, 2004, a customer initiated a complaint regarding alleged actions that occurred while Mr. Szempruch was associated with S.W. Bach & Company. The customer alleged unauthorized trading. The customer further alleged damages of $5,994.35. On June 9, 2004 the complaint was settled in the amount of $250.00.
If you or someone you know has or had a brokerage account with Douglas Edward Szempruch and have concerns regarding losses in your investments or possible sales practice violations including fraud, churning or unsuitability, 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.