Benjamin Davis Allegedly Violated Suitability Rule with Margin Trading

Benjamin Davis (CRD #: 2084509), a broker registered with Oppenheimer & Co., is the subject of an investor dispute. This disclosure appears on his BrokerCheck record, accessed on September 25, 2023. Keep reading if you have questions about his alleged conduct. 

On July 17, 2023, investors alleged that Benjamin Davis breached his fiduciary duty and breached his contract. They further alleged that he engaged in negligence and fraud. Finally, they alleged that he violated FINRA suitability rules concerning excessive trading in their margin accounts. This alleged activity took place from 2016 through 2019. 

Excessive Trading

FINRA Rule 2111, a.k.a. The Suitability Rule, requires brokers to tailor their investment recommendations to suit investors’ needs. Trades must be quantitatively suitable, meaning the number of trades must suit an investor’s needs. Each trade comes with a transaction fee, so too many transactions will result in excessive fees for the investor. Excessive trading is also known as “churning.” 

What is Margin Investing? 

Investing on margin is when an investor opens a margin account and borrows money from a brokerage firm in order to purchase more securities. Using borrowed money is called “leverage” and it increases the risk that the investor will lose money. Margin accounts may come with interest charges, significant broker fees, and the risk of a margin call. 

Margin calls happen when the broker needs more money in the account in order to cover the minimum margin requirement. If the investor does not deposit money in the margin account, the broker may liquidate securities in the investor’s account in order to cover the minimum. 

Utilizing margin is often unsuitable and investors should be made aware of the risks before purchasing securities on margin. 

Background Information 

Benjamin Davis passed the following exams: 

• Series 66 Uniform Combined State Law Examination
• Series 65 Uniform Investment Adviser Law Examination 
• Series 63 Uniform Securities Agent State Law Examination 
• SIE – Securities Industry Essentials Examination 
• Series 7 General Securities Representative Examination 

Benjamin Davis has registered with 27 states and is a registered investment adviser in New Jersey and New York. 

During his 32 years of experience, Benjamin Davis has registered with five firms: 

• Oppenheimer & Co. (CRD #: 249) 
• Josephthal (CRD #: 3227) 
• Barington Capital Group (CRD #: 3227) 
• Merrill Lynch, Pierce, Fenner & Smith (CRD #: 7691) 
• Lehman Brothers (CRD #: 7506) 

Kurta Law Can Help

If you worked with Benjamin Davis and have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm that exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.