Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Danny Spiegel (Spiegel), previously associated with Sa Stone Wealth Management Inc., has at least one disclosable event. These events include one tax lien, alleging that Spiegel recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on January 14, 2025.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted against Danny Z. Spiegel (‘Spiegel’ or ‘Respondent’). In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the ‘Offer’) which the Commission has determined to accept. On the basis of this Order and Respondent’s Offer, the Commission finds that these proceedings arise out of unregistered broker activity by Spiegel who, between at least June 2019 and March 2020 (the ‘Relevant Period’), solicited investors on behalf of StraightPath Venture Partners, LLC (‘StraightPath’). StraightPath was an entity that offered investments in privately offered membership interests in limited liability companies (the ‘StraightPath Funds’) that each purportedly owned shares of private issuers that had prospects of becoming publicly traded issuers (‘Pre-IPO Issuers’). During the Relevant Period, Spiegel successfully solicited, either directly or through other unregistered agents he compensated, at least $6 million in investments for the StraightPath Funds from at least 80 investors. Through his unregistered conduct brokering transactions between investors and the StraightPath Funds, Spiegel received over $142,000 in transaction-based compensation. As a result of this conduct, Spiegel willfully violated Section 15(a) of the Exchange Act.
Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated ‘Regulation Best Interest (Reg BI)‘ which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.
Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. The cost of the recommendation and information about the investor are always part of material information. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.
In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. So, a brokerage firm should not depend solely on information from the issuer regarding a company, but must perform its own thorough investigation.
Additional, it should be required to mandate broker disclosures for investor’s protection. Brokers are required to report events to FINRA, such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters, as shown on their BrokerCheck reports. FINRA has recognized that recent studies offer evidence showing that brokers with a past record of regulatory and customer complaint issues are more likely to have such issues in the future. FINRA’s Office of the Chief Economist (OCE) published a study showing the predictability of disciplinary and disclosure events based on past similar events. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.
Spiegel has been in the securities industry for more than 13 years. Spiegel has been registered as a Broker with Sa Stone Wealth Management Inc. since 2012.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.
