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FINRA Suspends Ex-Melville Broker Douglas Szempruch: Suitability
Douglas Szempruch (CRD# 4159318), previously a stockbroker in Melville, New York, was sanctioned by the Financial Industry Regulatory Authority over findings he engaged in unsuitable trading. Formerly a representative of Aegis Capital, Mr. Szempruch was suspended from acting as a broker.
According to a Letter of Acceptance, Waiver and Consent (No. 2017054317401) released on July 9, 2021, Douglas Szempruch was associated with Aegis Capital when, between August 2014 and June 2017, he engaged in forms of misconduct that included excessive and unsuitable trading, unauthorized use of discretion, and sending emails with misleading statements about an investment opportunity.
FINRA’s findings state that he engaged in excessive, unsuitable trading in four six customers accounts over which he held de facto control, specifically describing the activities as follows: in the first customer’s account, his trading resulted in $9,517 in commissions and $9,966 in losses; in the second customer’s account, his trading resulted in $6,546 in commissions and $3,415 in losses; in the third customer’s account, his trading resulted in $22,572 in commissions and $32,103 in losses; in the account of the fourth customer, a senior, his trading resulted in $23,480 in commissions and $20,046 in losses; in the fifth customer’s account, his trading resulted in $27,481 in commissions and $16,832 in losses; and in the sixth customer’s account, his trading resulted in $37,602 in commissions and $75,243 in losses. FINRA concluded that his conduct was excessive and unsuitable given the customer’s profiles.
FINRA’s findings go on to state that between August 2014 and October 2016, Mr. Szempruch “exercised discretion to effect 578 trades in seven customers’ accounts without prior written authorization.” Six of those seven customers were those in whose accounts he engaged in excessive trading. None of them gave prior written authorization for him to exercise discretion, FINRA states, nor did the firm accept the accounts for discretionary trading.Finally, the AWC Letter states that between May and June 2017, Douglas Szempruch sent an email to 34 prospective customers in which he made “misleading statements concerning investments” in an unspecified company. The inaccurate statements included assertions that he had visited the company’s production facility, that he “had met and was in direct communication” with its management, that he “was participating in weekly calls” with its management, and that he “had first-hand information about” it, none of which, FINRA states, was accurate.
As a result of these findings, FINRA suspended Mr. Szempruch from associating with any FINRA member in any capacity for one year and ordered him to pay $99,720.87 plus interest in restitution.
According to the Financial Industry Regulatory Authority, Douglas Szempruch holds 21 years of securities industry experience. He is currently suspended from acting as a broker. His past registrations include Aegis Capital Corporation, Global Arena Capital Corporation, Prestige Financial Center, SW Bach & Company, Harrison Securities, and Weatherly Securities Corporation. He presently holds no state licenses. (Information accessed on January 10, 2022.)
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