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Robert W Pearce
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Mr. Pearce has tried, arbitrated and mediated numerous disputes involving complex securities, commodities, administrative, contract, commercial, business tort and employment law issues for over 35 years. He has represented hundreds of clients in Federal and state courts (trial and appellate) as... More
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The Law Offices of Robert Wayne Pearce, P.A.
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The Investor's Rights Law Blog
    Sep 18, 2013 3:41 PM

    Donald Richard Dahn, a Former Mutual Service Corporation broker located in Palm City, Florida, submitted a letter of acceptance, waiver, and consent in which he was suspended from association with any Financial Industry Regulatory Authority (FINRA) member in any capacity for six months. Due to Mr. Dahn's financial situation, no fine was imposed. Mr. Dahn consented to the sanction and to the entry of findings that he borrowed a total of $240,900 in business loans from customers, for operating expenses for a company Mr. Dahn and his brother operated, but he failed to disclose the loans to his member firm. FINRA's findings stated that in two of the cases, Mr. Dahn co-signed promissory notes executed on behalf of the customers even though the firm's written supervisory procedures prohibited borrowing money from customers. Mr. Dahn failed to repay the loans to the customers, which his firm ultimately reimbursed.

    Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages can bring forth claims to recover losses against Mutual Service Corporation due to Mr. Dahn's failure to disclose and promissory note co-signatures, which clearly violated Mutual Service Corporation's written supervisory procedures prohibiting such activity.

    The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. Please see our Instablog profile (left column) for ways to contact us and get answers to any of your questions about this blog post and/or any related matter.

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