According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker David Endom (Endom), previously associated with Bb & t Securities, LLC, has at least one disclosable event. These events include one tax lien, alleging that Endom recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on November 26, 2024.
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 Level Field Charter Partners, LLC (‘Level Field’) and David Endom (‘Endom’). II. In anticipation of the institution of these proceedings, Level Field and Endom (collectively, ‘Respondents’) have submitted Offers of Settlement (the ‘Offers’) which the Commission has determined to accept. The commission finds that This matter involves unregistered municipal advisory activity and other improper conduct by Level Field and its co-founding partner, David Endom. From 2019 to 2022, Level Field, through Endom, provided municipal advisory services in connection with six municipal bond issuances for the benefit of four charter schools. These services included providing advice to the charter schools on the structure, timing, and terms of the issuances. During this period, Level Field was not registered as a municipal advisor. In each of its engagement agreements with the charter schools, Level Field represented and warranted that it possessed all licenses, permits and certifications required to perform its obligations under the agreements, and further represented and warranted that it was in full compliance with all applicable laws, rules and regulations. By engaging in municipal advisory activities without registering with the Commission, Level Field willfully1 violated the registration requirements of Section 15B(a)(1)(B) of the Exchange Act, and Endom caused Level Field’s violation. By failing to disclose material facts related to its registration status to their clients, Level Field and Endom did not deal fairly with their clients in willful violation of Rule G-17 of the Municipal Securities Rulemaking Board (‘MSRB’). By violating MSRB Rule G-17, Level Field and Endom also willfully violated Exchange Act Section 15B(c)(1).
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 included in 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.
Another protective measure for investors is to mandate broker discloses. Brokers are required to disclose reportable events such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters on FINRA’s BrokerCheck reports for public viewing. FINRA has recognized that recent studies offer evidence showing that brokers with a past history 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.
Endom has been in the securities industry for more than 3 years. Endom has been registered as a Broker with Bb & t Securities, LLC since 2017.
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.