May 12, 2021
On March 17, 2021, the Financial Industry Regulatory Authority (FINRA) Department of Enforcement filed a Complaint with the FINRA Office of Hearing Officers alleging that Kishan Parikh made unsuitable recommendations and excessively traded the accounts of five investors from August 2014 through November 2016. At the time of the alleged misconduct, Parikh was associated with Aegis Capital Corp. in New York, New York.
According to the AWC, Parikh made unsuitable recommendations and made 442 trades with a total principal of approximately $31.1 million. Due to this unsuitable and excessive trading, Parikh’s customers saw turnovers from 10.9 to 199.8 and annualized cost-to-equity ratios from 27.5% to 59.7%. FINRA alleges in the Complaint that Parikh did not calculate cost-to-equity or turnover rates, or consider the cumulative trading costs incurred by customers when deciding which stocks to buy and sell.
Parikh’s customers lost over $33,000 due to his activity, and he caused his customers to pay nearly $180,000 in gross sales credits and commissions. Parikh received at least $89,000 of this total in commissions. Based on the foregoing, Parikh violated FINRA Rules 2111 and 2010.
FINRA also alleges in the AWC that Parikh executed dozens of trades with a total principal value of approximately $4.2 million in two customers’ accounts without their authorization. Thus, Parikh further violated FINRA Rule 2010.
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