The Financial Industry Regulatory Authority said Wednesday that it barred former K.C. Ward Financial registered representative Craig David Dima. The ex-advisor made about $15 million of “unauthorized and unsuitable trades” in a 73-year-old retiree’s account, the group says, and misrepresented the reasons for the trades to the client.
“There is no place in this industry for brokers who take advantage of elderly customers,” said Susan Schroeder, FINRA acting head of Enforcement, in a statement. “Protecting senior investors from predatory behavior such as unsuitable and unauthorized trading is part of our core mission and will always be a priority for FINRA.”
According to FINRA BrokerCheck records, the former rep had been in the industry for 21 years — during which time he was affiliated or worked for 18 different firms and had 12 regulatory and compliance disclosures, including two employment separations after allegations in 1996 and 2001.
In more than 10 instances and without permission, FINRA says, Dima sold all of the female investor’s Colgate-Palmolive stock, which she had amassed over nearly 30 years of employment with the company.
Further, the former registered rep charged the retiree over $375,000 in mark-ps, markdowns and fees, while depriving her “of substantial dividends had she held the Colgate shares as intended,” the regulator points out.
“In fact, Dima sold the customer’s shares even after the customer told Dima not to sell the stock, which she considered a valuable long-term investment and reliable source of dividends,” FINRA explained in a press release.
When confronted by the client, Dima said the stock sales were due to a “computer glitch” or a “technical error.”
FINRA found that his trades were unsuitable and violated rules prohibiting excessive markups and markdowns. In settling this matter, Dima nether admitted or denied the charges, but consented to the entry of FINRA’s findings.
Calls to K.C. Ward Financial, which is based in Ronkonkoma, New York, were not returned as of press time.
K.C. Ward’s BrokerCheck records show that it has three disclosures, including censures and fines of $16,500 in 2015, $15,000 in 2013 and $7,500 in 2010.