In the ever-evolving landscape of financial regulations and securities law, the expertise of seasoned securities lawyers is indispensable. Bakhtiari & Harrison, a leading law firm foucsing on securities law, continues to uphold its commitment to providing top-notch legal services to clients navigating complex regulatory environments. Recent events surrounding Dawson James Securities, Inc. and Robert Dawson Keyser Jr. underscore the critical role that diligent legal oversight plays in maintaining compliance and protecting financial interests.
On April 5, 2024, Dawson James Securities, Inc. (CRD #130645, Boca Raton, Florida) and Robert Dawson Keyser Jr. (CRD #1291503, Boca Raton, Florida) were issued a Letter of Acceptance, Waiver, and Consent (AWC). The firm was censured, fined $500,000, and required to comply with specific undertakings. Keyser was fined $10,000 and suspended from association with any FINRA member in all capacities for one month. These sanctions were imposed after considering various factors, including the firm’s revenue and financial resources.
Without admitting or denying the findings, Dawson James Securities and Keyser consented to the sanctions and acknowledged the entry of findings. The firm failed to preserve and reasonably supervise business-related text messages sent by Keyser and other associated persons. These communications included crucial discussions about the firm’s net capital computations, customer complaints, and holding or selling positions in stocks and warrants. Despite knowing that associated persons used text messaging for business communications, the firm did not enforce its prohibition against using text messaging for business purposes. This failure resulted in inaccurate books and records.
Following a FINRA examination, the firm retrieved and reviewed the text messages sent and received using mobile phones issued to Keyser and others. Additionally, the firm’s supervisory system, including its written supervisory procedures (WSPs) for due diligence on private placement offerings, was found to be deficient. The firm unreasonably relied on a due diligence file compiled by its investment bankers, who held a majority ownership interest in the issuer, and failed to maintain proper records of due diligence conducted on follow-on offerings.
The suspension for Keyser was in effect from May 6, 2024, through June 5, 2024, highlighting the importance of strict adherence to regulatory requirements. This case illustrates the necessity for robust compliance frameworks and vigilant oversight to prevent such infractions.
At Bakhtiari & Harrison, our securities lawyers are dedicated to ensuring that our clients avoid the pitfalls that Dawson James Securities encountered. We provide comprehensive legal guidance to help firms establish and maintain effective compliance programs, conduct thorough due diligence, and navigate the complexities of securities regulations. Our goal is to safeguard our clients’ interests and ensure their operations remain within the bounds of the law.
For more information on how Bakhtiari & Harrison can assist with securities law matters, contact us today. Our team of experienced securities lawyers is here to provide the expertise and support you need to stay compliant and protected in an increasingly regulated financial landscape.