David Katz
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About David Katz
David Jordan Katz, a financial advisor affiliated with Merrill Lynch in New York, NY, has a professional history that includes significant disciplinary actions, raising concerns about his adherence to industry regulations and ethical standards.
Professional Background and Affiliations: David Katz has been registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated since 2009, operating from their New York office. His role involves providing wealth management services, including investment advice, portfolio management, and financial planning. Over the years, Katz has built a reputation for managing significant assets, reportedly overseeing $1.8 billion for clients.
Disciplinary Actions and Regulatory Concerns: Katz’s professional conduct has come under scrutiny due to disciplinary actions by regulatory bodies, particularly the Certified Financial Planner (CFP) Board. In May 2022, the CFP Board’s Disciplinary and Ethics Commission issued a three-month suspension of Katz’s right to use the CFP® certification marks. This action was taken after determining that Katz violated several rules of the CFP Board’s Code of Ethics and Standards of Conduct:
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Violation of Regulatory Requirements: Katz entered into a Letter of Acceptance, Waiver, and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA), consenting to findings that he violated FINRA Rule 2010. The violation occurred when Katz reused a customer’s signature page 11 times—with the customer’s permission—to expedite transaction processing. This practice is considered a breach of ethical standards, as it compromises the integrity of client documentation.
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Violation of Employer’s Policies: Katz’s reuse of original signatures was in direct violation of his firm’s policies and procedures. Financial institutions have strict guidelines to ensure compliance with regulatory standards and to protect client interests. By circumventing these policies, Katz demonstrated a disregard for established protocols designed to maintain transparency and accountability.
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Failure to Notify CFP Board: Katz did not provide written notice to the CFP Board within 30 calendar days after being the subject of a regulatory action involving failure to comply with laws, rules, or regulations governing professional services. This omission is a violation of Standard E.3.c. of the CFP Board’s Code and Standards, which mandates timely disclosure of such events to uphold the profession’s integrity.
As a result of these violations, the CFP Board imposed a suspension on Katz’s CFP® certification from June 6, 2022, through September 6, 2022.
Implications of Disciplinary Actions: The disciplinary actions against Katz have several implications:
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Trust and Credibility: Financial advisors are entrusted with managing clients’ assets and providing sound financial advice. Violations of regulatory standards can erode client trust and damage the advisor’s credibility.
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Professional Reputation: Suspensions and disciplinary actions are public records that can negatively impact an advisor’s reputation within the industry, potentially leading to loss of current and prospective clients.
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Compliance and Oversight: Such incidents highlight the importance of adherence to compliance protocols and the need for robust internal controls within financial institutions to prevent unethical practices.
This analysis highlights the importance of due diligence when selecting a financial advisor, emphasizing the need to consider both professional achievements and any disciplinary actions that may impact the advisor’s ability to serve clients effectively.
- This summary is automatically created and published by data analyzed and provided by DeepSeek, Grok and Google.
Red Flags & Disclosures on David Katz
In March 2008, a customer lodged a dispute against David Katz, alleging unsuitability and misrepresentations related to Auction Rate Securities (ARS). The client did not specify the damages sought; however, the matter was settled for $4,850,000.
Katz contended that the transactions occurred before mid-February 2008, prior to the widespread auction failures and illiquidity in the ARS market. He asserted that he neither caused nor had control over these market events. His firm reached an agreement with regulators to repurchase ARS at their full par value from affected clients, regardless of whether they had lodged complaints. Katz was not a party to this agreement, did not make any payment to the client, and did not contribute to the repurchase amount. The settlement amount reflects the par value of the repurchased ARS, as mandated by FINRA Regulatory Notice 09-12.
The 2008 ARS market collapse serves as a cautionary tale about the risks associated with such investments and the importance of aligning investment strategies with clients’ risk tolerance and financial goals.
In May 2022, the Certified Financial Planner Board of Standards, Inc. (CFP Board) issued a three-month suspension to Allan Katz of Staten Island, New York, restricting his right to use the CFP® certification marks. This disciplinary action stemmed from Katz’s violation of several professional conduct standards.
The CFP Board’s Disciplinary and Ethics Commission found that Katz had reused a customer’s signature page eleven times, with the customer’s consent, to expedite transaction processing. This practice was deemed a violation of FINRA Rule 2010, as it compromised the integrity of client documentation. Additionally, Katz’s actions were in direct contravention of his firm’s policies and procedures, further breaching the ethical standards expected of CFP® professionals.
Furthermore, Katz failed to provide timely written notice to the CFP Board within thirty days after being the subject of a regulatory action, as mandated by Standard E.3.c. of the CFP Board’s Code and Standards. Consequently, his suspension was effective from June 6, 2022, through September 6, 2022.
How to report David Katz to FINRA
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