Fined and Suspended by FINRA: Douglas J. Dannhardt of Prospera Financial Services, Inc.

Broker faces $25,000 fine and 9 month suspension for excessive trading

As a broker in the securities industry for over 29 years, Douglas J. Dannhardt recently settled a FINRA disciplinary action relating to allegations of excessive trading in a customer’s account.

According to the FINRA BrokerCheck website, Dannhardt’s first disclosure event was a customer dispute in June 2012 in which the claimants alleged Dannhardt excessively traded within their accounts, made unsuitable investments, breached their contract, breached his fiduciary duty and failed to supervise their interests. The claim was ultimately settled for $300,000.

The second and most recent disclosure event has resulted in Dannhardt being suspended from the securities industry and being fined $25,000 by FINRA. In this case – without admitting or denying the findings – Dannhardt consented to the findings that he allegedly:

• Excessively traded and made unsuitable investments within three client accounts over which he had control, which resulted in a combined realized loss of over $135,000.
• Used improper exercise of discretion by executing trades outside of the same-day window requirement “without first obtaining written authorization by the customer and written acceptance of this arrangement by the firm.”
• Accepted third-party discretion without written authorization by the client.

Excessive trading, frequently referred to as churning, is when a stockbroker trades a customer’s account in order to generate excessive fees, costs or commissions generally for the brokerage firm’s profit. Commissions or markups can greatly impact an investor’s portfolio because every dollar spent on expenses must be earned in market gains just for the account to break even.

Everyone registered to sell securities or provide investment advice is required to disclose customer complaints and arbitrations, regulatory actions, employment terminations, bankruptcy filings, and criminal or civil judicial proceedings to FINRA during a disclosure event.

Even still, broker misconduct affects investors every day and Silver Law Group wants to make sure that investors know their rights. If you feel Douglas Dannhardt or any financial adviser has failed to perform in your best interest, you may have legal avenues to pursue.

Allow Silver Law Group to guide you through your options in securities arbitration with a free consultation, either in person or on the phone. Each case is handled on a contingent fee basis, meaning that you only pay legal fees if Silver Law Group is successful in your case.

Our attorneys are skilled, experienced, and ready to help you. Contact Silver Law Group today for your free consultation to begin your path to loss recovery.