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Attention PHX Financial (Hauppauge, NY) Customers: Review Your Accounts For Losses

March 23, 2023

Investment Losses at Phoenix Financial Services? KlaymanToskes Has Recovery Options

National investment loss lawyers KlaymanToskes is investigating Phoenix Financial Services, Inc. (“PHX Financial”) brokers/financial advisors in Hauppauge, NY with significant FINRA disclosure histories, including investor complaints, disciplinary actions, and previous employment disclosure allegations.

KlaymanToskes encourages investors to use FINRA’s free BrokerCheck tool to learn more about their broker/advisor and brokerage firm in order to lessen their risk of becoming a victim of financial misconduct and/or incurring investment losses. If your broker’s profile has significant disclosures, KlaymanToskes recommends reviewing your account for misconduct similar to that alleged in the disclosures.

Contact KlaymanToskes today at (888) 997-9956 or lklayman@klaymantoskes.com to discuss your potential case and learn more about FINRA’s arbitration process. Consultations are free and we do not collect attorney’s fees unless we are able to obtain a financial recovery for you.

PHX Financial’s Disciplinary History with FINRA

PHX Financial was recently hit with regulatory sanctions of a censure and $50,000 fine, along with being ordered to pay $356,711 in restitution to a customer, due to allegations that the firm did not establish or maintain a supervisory system to identify or prevent excessive trading (“churning”) and options trading violations

The firm and Robert Charles Delaplain (CRD#1017107), as President and Registered Options & Securities Futures Principal (“ROSFP”), as well as branch supervisor for the New York, NY branch of PHX Financial entered into a letter of Acceptance, Waiver, and Consent with FINRA’s Department of Enforcement. Delaplain allegedly failed to reasonably supervise two representatives who engaged in unsuitable excessive trading and unsuitable options trading. Delaplain also served as PHX Financial’s CCO from 2012 to 2015. 

The AWC alleges one of the brokers involved, Halil Kozi (CRD# 1121714) was named ROSFP by the firm in May 2013 giving him responsibility for reviewing and approving new options accounts, confirming suitability risk levels for new accounts, and reviewing options related exception reports. The AWC states “Kozi was a producing broker who engaged in extensive options trading for the customer from whom he earned most of his commissions, Customer A” and that PHX Financial “did not take any steps to ensure that a different options principal was reviewing options-related alerts related to that customer.” 

Kozi was responsible for reviewing options related alerts for his own customer (Customer A) and “effected more than 100 solicited trades involving speculative options trading strategies that were inconsistent with Customer A’s balanced growth investment objective and moderate risk tolerance.” This resulted in Customer A’s account generating “over $135,000 in gross commissions and over $97,000 in commissions to Kozi, while the customer incurred a net loss of nearly $72,000.”

The AWC further alleged that “the firm’s written procedures did not identify any steps a supervisor should take to identify or prevent excessive trading or take if the supervisor identified excessive trading, including what remedial steps should be taken and/or and how those steps should be documented.” 

On March 17, 2020, an Offer of Settlement was issued suspending Kozi in all capacities for two years stating FINRA’s finding that Kozi had excessively traded a customer’s account and made unsuitable investment recommendations. Kozi is not currently registered and was last associated with Windsor Street Capital in 2017. The firm was expelled in 2018. The AWC identifies the second representative that Delaplain failed to supervise as “RR” and states that this individual has since been barred from the securities industry. 

Broker/Adviser Alert: PHX Financial’s Hauppauge, NY Branch 

According to securities fraud attorney Lawrence L. Klayman, Esq., “PHX Financial’s recent FINRA disciplinary action (AWC) alleges broker misconduct and failure to maintain a reasonably designed supervisory system to detect excessive trading in customer accounts. Similar misconduct described in the customer complaints and regulatory actions brought against the PHX financial professionals listed below may indicate a lack of supervision at PHX’s Hauppauge, NY branch.”

The following list contains five brokers/financial advisors currently registered with Phoenix Financial Services, Inc. in Hauppauge, New York. PHX Financial’s Hauppauge branch is located at 150 Motor Parkway, Suite 302. According to their linked FINRA BrokerCheck profiles, these individuals have several public disclosures:

Donald Angelo Durando (CRD# 5509340)

  • 2 customer complaints settled in favor of the investors:
    1. Investor alleged unsuitable investment recommendations.
      (Settled in favor of the investor for $230,000)
    2. Investor alleged unsuitable investment recommendations.
      (Settled in favor of the investor for $7,500)

Mark Jude Ketner (CRD# 1138522)

  • 12 public disclosures: 7 customer complaints settled/awarded in favor of the investors:
    1. Regulatory Action initiated by FINRA: Ketner consented to sanctions of a $5,000 fine, $1,054.33 to be paid in restitution, and a two month suspension related to findings that he engaged in an unsuitable pattern of short-term trading of unit investment trusts (“UITs”) in connection with the accounts of customers. Allegedly, the majority of the UITs that Ketner recommended had maturity dates of at least 24 months and carried sales charges ranging from 1.95 percent to 3.95 percent. Allegedly, the average holding period for the UITs recommended by Ketner was 195 days and on multiple occasions, Ketner recommended that a customer use the proceeds from the short-term sale of a UIT to purchase another UIT with identical investment objectives. 
    2. Investor alleged unsuitable investments and excessive trading.
      (Investor Awarded $199,788)
    3. Investor alleged unsuitable investment practices.
      (Settled in favor of the investor for $150,000)
    4. Investor alleged suitability.
      (Settled in favor of the investor for $55,000)
    5. Investor alleged unsuitable investment recommendation.
      (Settled in favor of the investor for $30,000)
    6. Investor alleged unsuitable investments and excessive trading.
      (Settled in favor of the investor for $42,500)
    7. Investor alleged churning.
      (Settled in favor of the investor for $25,000)
    8. Investor alleged unsuitable investments.
      (Settled in favor of the investor for $40,000)
    9. Four tax liens
      (In the total amount of $203,276.30)

Steven Anthony Busto (CRD# 2522780)

  • 6 public disclosures: 3 customer complaints, 2 tax liens, 1 bankruptcy:
    1. Investor alleges unauthorized transactions in his account.
      (Pending – Alleged Damages $83,045)
    2. Investor alleged the representative supervised the broker of record and that their account lacked supervision.
      (Settled in favor of the investor for $35,000)
    3. Investor alleged a misunderstanding concerning a commission charge on a single transaction.
      (Investor Awarded $250)

Alexander Humberto Stern (CRD# 2471393)

  • 4 public disclosures: 2 customer complaints, 2 judgment/liens:
    1. Investor alleged breach of contract, misrepresentation, negligence, and breach of fiduciary duty.
      (Settled in favor of the investor for $95,000)
    2. Investor alleges Stern constantly bought and sold stocks and lost over $109,000 dollars. Investor stated that he did not know much about stocks or mutual funds but put his trust in Mr. Stern.
      (Pending – Alleged Damages $109,000)

Baris Cabalar (CRD# 4749342)

  • 9 public disclosures: 3 customer complaints settled in favor of the investors, 5 tax liens, 1 criminal final disposition:
    1. Investor alleged specific allegations were made verbally to the firm by attorneys during the month of March, 2019 and that allegations covering all account activity between 11/05/2018 & 02/27/2019 were based on excessive trading & commissions.
      (Settled in favor of the investor for $185,000)
    2. Investor alleged unsuitability, breach of fiduciary duty, common law fraud, breach of contract, churning and violation of the Arkansas Securities Act.
      (Settled in favor of the investor for $5,000)
    3. Investor alleged churning, unsuitability, breach of contract, breach of fiduciary duty, negligence, and misrepresentation.
      (Settled in favor of the investor for $14,500)
    4. Five tax liens
      (In the total amount of $193,147.57)

How Can I Recover My Losses?

KlaymanToskes encourages investors who did business with Phoenix Financial’s Hauppauge, NY branch and/or any of the brokers listed above to review their accounts for signs of broker misconduct and/or investment losses.

Customers of PHX Financial Services that have suffered investment losses as a result of their broker/financial advisor’s recommendations may hold their brokerage firm and financial professional responsible through a FINRA arbitration claim.

Investors that suffered significant losses should contact attorney Lawrence L. Klayman, Esq., at 888-997-9956, or lklayman@klaymantoskes.com to discuss their recovery options at no cost. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.

About KlaymanToskes

KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.

Contact

KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com