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David Colflesh: FINRA Suspends Tarkio, Missouri Financial Advisor
A disciplinary action taken by the Financial Industry Regulatory Authority against former Tarkio, Missouri broker and investment advisor David Colflesh (CRD# 1184117) suspended him over allegations he recommended customers invest in non-diversified mutual funds without having a reasonable basis to believe they were suitable. A former representative of NYLife Securities, Colflesh was suspended for 18 months and ordered to pay disgorgement exceeding $34,500.
According to a Letter of Acceptance, Waiver and Consent (No. 2016050685101) dated October 2018, David Colflesh was associated with NYLife Securities when, between October 2014 and July 2015, he recommended about 90 customers invest in three non-diversified mutual funds although he did not have a reasonable basis to believe the recommendations were suitable “for at least some investors, because he did not understand the funds’ complexity and potential risks.” FINRA’s findings state that he also recommended about 48 of the customers in question “make concentrated investments in the funds” that exposed them to unsuitable risk levels. His knowledge of the funds was allegedly based on a presentation to his firm’s salespeople and a review of sales literature; FINRA states that he “spent less than an hour reviewing the funds’ prospectus,” did not receive or investigate any other information about them, and ultimately “did not understand the magnitude” of their risks before he began recommending them to customers. As a result of his recommendations, his customers “made approximately 250 purchases of the funds totaling approximately $4.5 million,” generating commissions for Colflesh of $34,546.98, the findings state. According to FINRA, these actions constituted violations of FINRA Rules 2111 and 2010. As a result of the foregoing alleged conduct, he was suspended from associating with any FINRA member firm in any capacity for 18 months. He was also ordered to pay disgorgement of the commissions he received, totaling $34,546.98 plus interest.
David Colflesh’s disclosure records also list 17 settled customer complaints against him, all alleging that he failed to communicate the risks associated with certain mutual fund purchases. These include settlements of the following amounts: $127,753.67, $66,919.62, $73,684.99, $64,933.53, $172,084, $100,776.96, $115,013, $69,639.10, and $105,585.92.
David Colflesh is currently not registered as a broker or investment advisor. His employment history includes NYLife Securities in Tarkio, Missouri, where he was registered from 1983 until 2016. He currently holds zero state licenses and has passed five securities industry qualification examinations.