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WARNING! Impending Investigation–DOUGLAS J. DANNHARDT and PROSPERA FINANCIAL SERVICES INC.

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03
Apr

WARNING! Impending Investigation–DOUGLAS J. DANNHARDT and PROSPERA FINANCIAL SERVICES INC.

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Douglas J. Dannhardt and Prospera Financial Services Inc.

Have you lost money with financial advisor Douglas J. Dannhardt from Dallas, Texas?  We are currently investigating allegations made by FINRA (the Financial Industry Regulatory Authority) made against Dannhardt. FINRA alleged that Douglas Dannhardt made unsuitable recommendations to his customers to switch from one mutual fund to another, amounting to excessive trading.

Dannhardt was alleged to have traded his customers’ mutual funds, often holding them for 3 months or less, than selling them and purchasing additional mutual funds.  If these mutual funds were held as “A” shares, those clients would have incurred anywhere from a 2% to 5% upfront sales charges each time.  Some customers had cost-equity ratios of over 23% annualized.  This means that the customer’s account would have had to earn a 23% profit each year just to break even to cover the commissions of the trading.  This type of trading was deemed to be excessive by FINRA.

FINRA alleged that this violated its suitability rules (including former NASD Rule 2310 and current FINRA Rule 2111), and it also alleged that Dannhardt used discretion (making trades without prior approval on each trade from the customer) in some customers’ accounts without prior authorization.  As part of this investigation, Douglas Dannhardt was suspended from the securities industry for 9 months and had to pay a $25,000 fine.

Douglas Dannhardt was a registered representative and financial advisor with Prospera Financial Services, Inc.  He is currently not affiliated with any securities brokerage firm.  He worked out of a branch office in Dallas, Texas.

Broker-dealers like Prospera Financial Services have a responsibility to adequately supervise all representatives who are registered through their firm, including investments sold by their registered representatives.  Broker-dealers also must take steps to ensure that their financial advisors follow all securities rules and regulations, such as to refrain from excessively trading a customer’s account or switching mutual funds.  When broker-dealers fail to adequately supervise their registered representatives, they may be liable for investment losses sustained by customers.

Our firm represents investors throughout the country who are victims of financial advisors’ negligence and fraud.  Our firm has offices in Denver and the Seattle-area, but we continue to represent investors throughout the U.S., including Texas.  Our attorneys have also represented clients against Prospera Financial Services in the past for allegations made against Douglas Dannhardt.   If you have lost money with Douglas Dannhardt or Prospera Financial Services, and want to hear about ALL legal options, please visit https://www.israelsneuman.com and go to our CONTACT page or call us at 720-599-3505.

Click to view:  Dannhardt FINRA AWC

Israels & Neuman, PLC is a private law firm and is not affiliated with any government or law enforcement agency. Any investigation referenced in this blog is independent in nature and is being conducted by our law firm privately, not in conjunction with any government or law enforcement agency. All information contained in this blog should be deemed statements of opinion derived from the author’s review of public records, not statements of fact. This blog is advertising material and does not create an attorney client relationship, nor does it constitute legal advice. Everyone’s situation is different and the question of whether or not you have a claim will vary on a case-by-case basis. In contingent representation, clients may still be liable for costs.
10.0David P Neuman

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