Harry Seth Datys Suspended from the Securities Industry by FINRAPublicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker, Harry Seth Datys (CRD # 1877750) was recently suspended from the securities industry by FINRA’s Department of Enforcement. The sanction occurred as a result of an investigation into the suitability of the sales of promissory notes to 14 customers. The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Mr. Datys.

Registration Background for Harry Seth Datys

Mr. Datys first became registered in the securities industry in 1990 and was most recently associated with New York, NY based WestPark Capital, Inc. (CRD # 39914) from June 2005 to January 2020. His prior registrations include Sterling Financial Investment Group, Inc. (CRD # 41506) from October 2002 to July 2005 and Joseph Stevens & Co., Inc. (CRD # 35459) from January 1995 to October 2002.

FINRA’s Allegations against Harry Seth Datys

FINRA’s investigation led to Mr. Datys entering into a Letter of Acceptance, Waiver and Consent (AWC) with FINRA on September 7, 2020. According to the AWC, Mr. Datys consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:

  • Between January 2012 and February 2016, in connection with two securities offerings, [Mr.] Datys solicited sales of 24 promissory notes issued by the firm’s parent, to 14 customers, raising a total of $2,713,200 and obtaining commissions of $183,000”;
  • [Mr.] Datys did not perform a reasonable review of the offering documents, which he received from the firm’s CEO, including the subscription agreement and financial statements that contained red flags about the parent’s ability to repay the notes”;
  • [Mr.] Datys failed to inquire about these red flags. For example, the offering documents from 2012 to 2014 stated that the parent had a $1 million line of credit with a bank”;
  • In addition, [Mr.] Datys did not conduct reasonable due diligence on the offerings and failed to understand the risks they presented”;
  • While soliciting investments, [Mr.] Datys negligently claimed that noteholders were entitled to share in pro-rata distributions of equity and profits from the firm, which had higher profits and greater equity-producing opportunities than its parent, the actual issuer and source of profits and equity for the noteholders”;
  • In addition, [Mr.] Datys negligently failed to disclose conflicts of interest that presented risks”;
  • [T]o solicit investments, [Mr.] Datys emailed customers a false “Historical Analysis” that he obtained from the CEO and negligently misrepresented that it showed investors what they could expect as a return on the notes, without disclosing that the information it contained was hypothetical, rather than historical”;
  • [Mr.] Datys also negligently provided investors with offering documents he received from the firm’s CEO that contained material misrepresentations and omitted material adverse facts”; and
  • By virtue of his actions, Mr. Datys violated NASD Rule 2310, regarding suitable recommendations to customers, FINRA Rule 2111, regarding suitability and FINRA Rule 2010, regarding standards of commercial honor and principles of trade, by acting in contravention of Section 17(a)(2) and (3) of the Securities Act, which prohibits fraud and misrepresentations in the offer and sale of securities.

FINRA Sanctions

As a result of such violations and in addition to the above described findings and conclusions, FINRA’s September 7, 2020 AWC also indicates that Mr. Datys consented to the following sanction(s):

  • A fine in the amount of $20,000.00; and
  • A suspension from association with any FINRA member firm in any capacity for a fifteen month period.

Harry Seth Datys Has a History of Customer Complaints

In addition to the findings of FINRA’s Department of Enforcement, FINRA BrokerCheck for Mr. Datys reveals that he has a history of customer complaint(s)/arbitration(s) that include, but are not necessarily limited to the following:

  • On February 24, 2017, a customer initiated arbitration was filed naming Mr. Datys as a respondent for actions that allegedly occurred while he was associated with WestPark Capital, Inc. The customer alleged Mr. Datys engaged in excessive and unsuitable trading without diversification and made misleading statements. The customer further alleged Mr. Datys’ actions resulted in damages in the amount of $250,000.00. On April 18, 2018, the arbitration was settled in the amount of $6,000.00.
  • On April 18, 2016, a customer initiated arbitration was filed naming Mr. Datys as a respondent for actions that allegedly occurred while he was associated with WestPark Capital, Inc. The customer alleged Mr. Datys engaged in various acts of negligence, breach of fiduciary duty and unsuitable recommendation with regards to a private offering. The customer further alleged Mr. Datys’ actions resulted in damages in the amount of $200,000.00. On August 18, 2017, the arbitration was settled in the amount of $50,000.00.
  • On September 2, 2011, a customer initiated arbitration was filed naming Mr. Datys as a respondent for actions that allegedly occurred while he was associated with WestPark Capital, Inc. The customer alleged Mr. Datys engaged in unauthorized trading with regards to a private placement. The customer further alleged Mr. Datys actions resulted in damages in the amount of $100,000.00. On January 30, 2013, the arbitration was settled in the amount of $52,500.00, with Mr. Datys responsible for the full amount of the award.
  • On December 16, 2003, a customer initiated a complaint against Mr. Datys for actions that allegedly occurred while he was associated with Sterling Financial Investment Group, Inc. The customer alleged Mr. Datys engaged in excessive and unauthorized trading, misrepresentation, the unauthorized use of margin, unsuitable investment recommendations. The customer further alleged Mr. Datys’ actions resulted in damages in the amount of $5,809.04. On March 15, 2004, the complaint was settled in the amount of $4,500.00.

If you or someone you know has or had a brokerage account with Mr. Harry Seth Datys 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.