Securities Arbitration Lawyer Blog
The Financial Industry Regulatory Authority (“FINRA”) has sanctioned Dawson James Securities, Inc. (“Dawson James”) for charging customers excessive commissions. On April 6, 2021, FINRA and Dawson James entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) whereby Dawson James accepted the following sanctions:
- a censure;
- a $20,000 fine; and
- restitution of $7,083.93 plus interest to customers.
Dawson James Securities, Inc’s principal place of business is in Boca Raton, Florida. The firm also has branch offices in Dayton, Maryland, and Manasquan, New Jersey.
If you are a customer of Dawson James and you have suffered financial losses, or have otherwise been harmed, contact securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your legal rights.
Customers that receive a partial recovery of losses through FINRA’s restitution order may still be entitled to additional recovery.
Dawson James Securities, Inc.
Dawson James Securities, Inc. is an SEC-registered broker-dealer with its principal place of business in Boca Raton, Florida. The firm has been a FINRA member since 2004. Dawson James currently employs approximately 40 registered representatives working out of three branch office locations: Boca Raton, Florida; Dayton, Maryland; and Manasquan, New Jersey. The firm’s business includes securities underwriting and retail brokerage services.
FINRA Letter of Acceptance, Waiver, and Consent No. 2017052790301
FINRA and Dawson James entered into a Letter of Acceptance, Waiver, and Consent on April 6, 2021, after alleging that from June 2015 through April 2020, Dawson James charged customers excessive commissions on 236 transactions.
FINRA Rule 2010 requires that “[a] member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.”
FINRA Rule 2121 Supplementary Material .01 set a guideline of five percent for determining whether a commission is unfair or unreasonable. However, the “5% Policy” is a guide, not a rule. A commission pattern of five percent or even less may be considered unfair or unreasonable.
The percentage of the commission is only one of the factors to be considered in determining fairness. FINRA Rule 2121 Supplementary Material .01 identify seven other factors that members should take into consideration in determining the fairness of a commission, including (i) the type of security involved; (ii) the availability of the security; (iii) the price of the security; (iv) the size of the transaction; (v) whether the member disclosed the transaction cost to the customer prior to the trade; (vi) any pattern of markups; and (vii) the nature of the member’s business, including the cost of providing services to customers, particularly when they are of a continuing nature.
The FINRA AWC specifically alleged:
- During the period of June 2015 through April 2020, Dawson James charged commissions on certain transactions in equity securities that were not fair and reasonable, taking into consideration the factors set forth in Rule 2121 Supplementary Material .01, and that exceeded five percent.
- As a result, on a total of 236 transactions during the relevant period, the firm charged $7,083.93 in excessive commissions.
- The commissions charged ranged from approximately five percent to 66 percent of the transactions’ principal value.
As a result, Dawson James violated FINRA Rules 2121 and 2010.
How to Recover Losses or Obtain a Free Consultation
If you or a loved one were a customer of Dawson James and either sustained financial losses or suspect inappropriate activity in your investment or retirement accounts, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.
Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.