Rick Davidson Involved in Investor Dispute Alleging Churning
Rick Davidson (CRD #: 1315998), a broker and investment advisor registered with Aegis Capital Corp., is involved in an investor dispute, according to his BrokerCheck record, accessed on April 18, 2022.
According to the allegations filed on January 27, 2022, Rick Davidson churned his client’s account without her knowledge. The investor is pending.
“Churning” refers to excessive trading that increases the broker’s commissions but results in losses for the investor.
FINRA Rule 2111 addresses the suitability of investments. It requires that brokers take into account their customers’ financial profiles before recommending trades. FINRA Rule 2111 also prohibits excessive trading, stating that trades must be quantitatively suitable — i.e., the number of trades must be suitable to the investor.
Settled Investor Disputes
In 2021 and 2016, Rick Davidson was involved in two investor disputes alleging unsuitability. The cases were settled for $886,507 and $175,000, respectively. Two other disputes were collectively resolved for $45,000.
“Suitability” is the term used to describe an ethical, enforceable standard for investments that financial professionals are bound to when dealing with clients. An investment is only considered “suitable” if it meets the suitability criteria outlined in FINRA Rule 2111.
Unauthorized Trading and Misrepresentation Allegations
On February 26, 2021, Rick Davidson was named in an investor dispute alleging misrepresentation and unauthorized trading. The case was settled for $77,500.
- FINRA Rule 2020 prohibits brokerage firms and stockbrokers from making material misrepresentations or inducing people into buying investments with false statements about their potential benefits.
- FINRA prohibits unauthorized trading, and FINRA Rule 3260 states that no broker shall exercise trading discretion in a customer account unless that account has been approved for discretionary trading, both by the customer and the firm.
On May 7, 2019, Rick Davidson filed for bankruptcy.
On May 17, 2016, Rick Davidson voluntarily resigned from his position at Morgan Stanley Wealth Management following allegations relating to his exercise of discretion in clients’ accounts as well as receipt of a loan from a Morgan Stanley employee.
Rick Davidson has passed the following exams:
- Series 66 – Uniform Combined State Law Examination
- Series 63 – Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
Rick Davidson is a registered broker in 18 states and a registered investment advisor in New Jersey and Florida.
Besides Aegis Capital Corp., Rick Davidson has also worked with the following firms:
- National Asset Management (CRD#:115927)
- National Securities Corporation (CRD#:7569)
- Jefferies Investment Advisers (CRD#:121767)
- Jefferies LLC (CRD#:2347)
- Morgan Stanley (CRD#:149777)
- Morgan Stanley & Co. Incorporated (CRD#:8209)
- Credit Suisse Securities (USA)(CRD#:816)
- Donaldson, Lufkin & Jenrette Securities Corporation (CRD#:7560)
Kurta Law Can Help
If you have worked with Rick Davidson and have concerns about your investments, don’t hesitate to contact us today at 877-600-0098 or email@example.com for a free consultation.
For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and 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.