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Dawson James Securities: Do You Know Their Record in the Securities Industry?

By: Jonathan Kurta Author

April 28, 2023 at 4:33pm

Dawson James Securities (CRD #: 130645) is a brokerage firm with 15 disclosures and 11 regulatory events on its BrokerCheck record. Investors should know this firm’s track record in the securities industry before investing. Reach out to a securities attorney if you suffered any losses after working with a Dawson James broker. The firm has headquarters in Florida as well as office locations in New York and Maryland.

Can I Sue Dawson James Securities?

Yes, you can recover money lost due to broker fraud or misconduct. Many investors will find that they signed a pre-dispute arbitration agreement. This agreement means that investors will have to use FINRA arbitration to recover losses, rather than suing in civil court. Securities attorneys can explain the process of FINRA arbitration in detail and can offer important insights into the FINRA arbitrator selection process.

Written by: Jonathan Kurta

Jonathan Kurta is an accomplished securities attorney and a founding partner at Kurta Law.

Miniature scales sit on a desk next to a gavel.

Conflicts of Interest

Brokerage firms require brokerage firms to disclose their conflicts of interest in their Customer Relationship Summary Form (Form CRS). You should always ask your broker about any conflicts of interest associated with an investment.

Dawson James has an incentive to encourage customers to trade more frequently since more frequent trades result in more commissions for the brokerage firm.
Mutual funds make ongoing payments to the firm, creating an incentive for brokers to recommend them over lower-cost alternatives.
Certain products provide the firm with shared revenue. The firm has an inventive to encourage you to purchase investments that pay the firm more.

Dawson James Broker Fees

Investors should be aware of fees that may come with their investing strategies. You will pay fees even if you lose money. Form CRS recommends that Dawson James investors ask, “If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?”

Dawson James charges transaction-based fees. These are usually referred to as commissions.
Bonds might feature built-in charges, like “markups” and “markdowns.”
Some types of investments, like mutual funds, come with “trail” commissions.
Investors may pay fees for account maintenance and wire transfers.

Regulatory Actions

Investors should review the most recent regulatory actions on Dawson James’ record. You can see the full list of regulatory actions in their detailed BrokerCheck record.

Alleged Excessive Commissions

On April 6, 2021, Dawson James consented to the findings that the firm charged $7,083 in excessive commissions. The findings stated that the commissions ranged from 5% to 66% of the transactions. FINRA Rule 2121 identifies “the 5% policy” as a guideline, not a rule, to determine the fairness of markups. Commissions that cost more than 5% of the investment may be excessive. The rule accounts for the pattern of markups and any disclosures made to the customer regarding the price of the commission.

As part of the Acceptance, Waiver, and Consent agreement (AWC), the firm agreed to repay the $7,063 and to pay a $20,000 monetary fine.

Alleged Violations of “Do Not Call” Rule

FINRA Rule 3230 prohibits brokers from initiating phone calls to individuals on the Federal Trade Commission’s Do Not Call list. On February 7, 2017, FINRA alleged that Dawson James called at least 49 phone numbers that appeared on the national DNC list. According to an AWC, Dawson James consented to a censure and a $20,000 fine.

Research and Private Offering Allegations

In an Acceptance, Waiver, and Consent agreement dated February 2, 2017, FINRA alleged that from 2009 through 2016, Dawson James Securities had supervisory failures in two key areas: Research and private offerings.

Private Offerings

Dawson James allegedly participated in a “best efforts” offering in which the firm allegedly failed to confirm that bon-fide sales were used to calculate the minimum contingency requirement in the offering. The firm was allegedly unaware that the minimum had been met using sales made to insiders.

Research Reports

Dawson James allegedly did not make sufficient disclosures in its research reports. For instance, the firm allegedly did not sufficiently disclose its ownership of securities issued by the companies featured in its reports.

As part of the terms of the AWC, Dawson James consented to a censure and a total fine of $75,000.