David Harari and his wife Sian Harari of San Antonio, Texas were accused by the Department of Enforcement of the Financial Regulatory Authority (FINRA) to have provided false information to a FINRA member firm, falsely obtain customer funds and to have failed to disclose tax liens on a Form U4.
David Harari entered the securities industry in 1999 when he joined Ameriprise Financial Services, Inc. Much of his services at Ameriprise as a registered investment advisor included providing clients with financial planning services for which he charged a flat fee. He also received commissions for the sale of other investment products. In July 2002, David’s wife Sian began working for him as an unregistered assistant.
In 2004, a customer contacted Ameriprise seeking to invest funds she was awarded in a divorce. This customer eventually became Harari’s client and over the next several years, became Sian’s close friend. In 2008, Harari was hospitalized with a serious illness and began having financial concerns which were expressed to the client. The client gave Sian a check for $20,000 dated February 28, 2008 with the expectation the funds would be used to cover expenses and then repaid to her. The client did not request payment of the loan for two years until she learned the Hararis paid for their daughter’s wedding.
Between 2007 and 2010, the client also made several payments to Harari for his financial planning services. On multiple occasions, the client paid Harari directly a check of $7,500 for his services. It was later discovered the client paid a financial planning fee twice in the same year for the same services. FINRA alleged that Harari was requesting payments on services that he had already been compensated for and hid them from Ameriprise. Harari claimed that the payments were cashed on behalf of the customer so that she would have cash for trips to Mexico. Ameriprise Ultimately reimbursed the client $30,000 for all the fees paid from 2007-2010. The client subsequently sued the Hararis for repayment on the $19,000 remaining due to the loan.
Harari left Ameriprise after an investigation was launched in December 2010 about potentially unsuitable investments in Harari’s customers’ accounts. After Harari left Ameriprise due to an ongoing investigation, he joined Raymond James & Associates, Inc. In January 2011, a routine background check revealed several tax liens totaling more than $200,000. In September 2009, the Hararis engaged a tax firm to assist them with their unpaid taxes. The draft Form U4 that Harari initially submitted to Raymond James did not disclose the liens. On the forms, Harari checked the “no” box in the filings when asked if he was subject to any liens.
The Hararis were barred from association with any FINRA member in any capacity and David was ordered to pay $15,000 plus prejudgment interest, as disgorgement.
Stockbrokers have been known to engage in many types of practices which violate industry and firm rules, practices, and procedures. In order to protect customers from stockbroker misconduct, FINRA rules require broker-dealers Ameriprise to establish and implement a reasonable supervisory system. The implementation of the rules require supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, and the firm, such as Ameriprise own policies and procedures. If broker dealers and/or their supervisors do not establish and implement these protective measures, they may be liable to investors for damages which flow from the misconduct. As a result, investors who have suffered losses because of their stockbroker’s unlawful or prohibited conduct can file a claim to recover damages against broker dealers like Ameriprise, which should consistently oversee its employees in order to prevent stockbroker misconduct.
Have you suffered losses in your Ameriprise investment account due to your stockbroker’s misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against stockbrokers for unsuitable recommendations, misrepresentations, and/or other unauthorized and prohibited conduct.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities, and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please post a comment, call (800) 732-2889, send Mr. Pearce an email at firstname.lastname@example.org, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.