Dan King: Terminated and Barred Following Allegations of Unsuitable Use of Margin
Dan King (CRD #: 5954543) has been fired by Kingswood Wealth Advisors (CRD #: 5954543), according to his BrokerCheck record, accessed on August 30, 2023. He has also been suspended by FINRA. Keep reading for more details concerning his alleged conduct.
On August 21, 2023, Kingswood Wealth Advisors terminated Dan King following allegations that he made unsuitable use of margin in two investor’s accounts.
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.
FINRA Suspension
On July 17, 2023, Dan King entered into an Acceptance, Waiver, and Consent agreement (AWC) in which he consented to the findings that he recommended unsuitable use of margin to effect trades in the accounts of two customers who were not sophisticated investors. This alleged misconduct allegedly caused the two investors to pay more than $46,000 in commissions, fees, and margin interest.
The margin positions allegedly frequently experienced price declines, causing the accounts to incur margin calls, which were allegedly often met by selling securities at a loss.
- One investor, a retiree, allegedly suffered unrealized trading losses of $22,486.27
- Another investor allegedly incurred unrealized trading losses of $58,050.27
As part of the terms of the AWC, Dan King consented to a $10,000 fine and a restitution payment of $33,374.31. He also consented to a two-month suspension.
You can read a copy of the AWC here.
Background Information
Dan King has passed the following exams:
- 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
He has registered with the following firms:
- Kingswood Capital Partners (CRD #: 288898)
- Benchmark Investment (CRD #: 103792)
- Newbridge Securities Corporation (CRD #: 104065)
- Legend Securities (CRD #: 44952)
- Tryco Securities (CRD #: 104025)
- Brookville Capital Partners (CRD #: 102380)
Kurta Law Can Help
If you worked with Dan King 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.
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