Douglas Blake Solinsky (CRD # 4715268) is a suspended New York-based broker employed by Kingswood Capital Partners, LLC. Solinsky has 19 years of experience in the securities industry and has worked for seven firms, including a 10-year stint at Newbridge Securities Corporation which was ended via termination in February 2019. On June 29, 2023, Solinsky accepted a $10,000 fine and four-month suspension from FINRA for engaging in excessive and unsuitable trading in customer accounts. In addition, Solinsky’s BrokerCheck Report shows he has a further seven disclosure events including six tax liens and a customer dispute settled for $90,000.
Complaint Against Douglas Solinsky
In the Letter of Acceptance, Waiver, and Consent (“AWC”), signed by Solinsky, FINRA found that from January to November of 2017, he excessively and unsuitably traded in the accounts of two of his customers in violation of FINRA rule, resulting in the accounts having to grow by 26% and 30%, just to break even to cover the costs of the trading.
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What is Excessive and Unsuitable Trading (“Churning”)?
Excessive trading, also known as “investment churning,” refers to the practice of a broker or investor excessively buying and selling securities within a short period to generate more commissions or fees. It involves frequent and unnecessary trading, often without regard for the underlying investment’s fundamentals. This behavior can be detrimental to investors due to increased transaction costs and potential tax consequences. It may also lead to reduced returns as the constant trading incurs expenses that erode gains.Investment churning is prohibited by the Financial Industry Regulatory Authority (“FINRA”). Specifically, investment churning is prohibited by FINRA Rule 2111 which requires brokers to have a reasonable basis for believing that recommended transactions are suitable for their clients based on factors such as the client’s financial situation, investment objectives, risk tolerance, and other relevant information. Churning conflicts with this rule because it involves excessive trading that may not align with the client’s best interests but instead aims to generate more commissions for the broker.
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