Securities Fraud Lawyer Blog
A recent FINRA enforcement action serves as a stark reminder that retired and elderly investors remain prime targets for unsuitable and risky investment schemes—often with devastating financial consequences.
This week, FINRA announced sanctions against Keith M. D’Agostino, a former broker at Aegis Capital Corp., fining him $25,000 and suspending him for two years for allegedly steering retirees into high-risk penny stocks that were wholly inconsistent with their stated investment goals. According to regulators, the misconduct resulted in more than $1.8 million in losses across 10 customer accounts. FINRA Disciplinary Actions Online | FINRA.org
When “Advice” Becomes Exploitation
FINRA found that between July 2020 and June 2023, D’Agostino recommended speculative microcap securities to customers who were retired or elderly, had low risk tolerance, and relied on their investments for income and financial security.
In some cases, these penny stocks made up as much as 94% of an investor’s portfolio—a level of concentration that exposed retirees to extreme volatility and illiquidity. For investors living on fixed incomes, losses of this magnitude can permanently derail retirement plans.
Regulators concluded that these recommendations violated the SEC’s Regulation Best Interest, which requires brokers to put their clients’ interests ahead of their own, as well as FINRA Rule 2010, the industry’s ethical standard.
A Pattern That Raises Serious Concerns
This was not an isolated incident. Since 2022, D’Agostino has accumulated 22 customer complaints, including 15 cases that settled for more than $5.6 million combined. Another seven pending claims are seeking approximately $2.4 million over allegations that include unsuitable investments and breach of fiduciary duty.
D’Agostino is no longer registered as a broker or investment adviser. He resigned from Aegis in November 2023 and briefly registered with a rebooted EF Hutton entity before exiting the industry.
For investors, a long complaint history like this is a powerful warning sign—one that often only becomes visible after significant losses have already occurred.
Firm Supervision Matters Too
Investor advocates have long argued that individual misconduct rarely occurs in a vacuum, and this case reinforces that concern.
Aegis Capital Corp. previously agreed to pay $2.8 million in 2021 to settle allegations that it failed to adequately supervise brokers engaged in unsuitable and excessive trading. FINRA’s continued focus on firm-level supervision suggests that regulators expect brokerage firms to do more than react after harm has been done—especially when seniors are involved.
What Investors Should Take Away
Retirees deserve investment advice that prioritizes safety, transparency, and long-term stability—not speculation that benefits brokers at the expense of clients’ financial security.
FINRA’s action sends an important message, but enforcement alone does not make harmed investors whole. Losses caused by unsuitable recommendations may still be recoverable through FINRA arbitration, even years after the investments were made.
Red Flags Checklist for Investors and Families
If you or a loved one recognize any of the following warning signs, it may indicate unsuitable or abusive investment practices:
- Penny stocks or microcap securities recommended for retirement accounts
- A portfolio heavily concentrated in one type of investment or sector
- Claims that risky investments are “safe,” “temporary,” or “about to take off”
- Investments that are hard to sell or thinly traded
- Losses that occurred despite being told your goal was income or capital preservation
- Frequent trading or recommendations that generate high commissions
- Pressure to act quickly or discouragement from getting a second opinion
- A broker who dismisses concerns or avoids clear explanations
- A broker with multiple customer complaints or disciplinary actions on BrokerCheck
A Call for Vigilance and Accountability
No investor—especially a retiree—should discover too late that their life savings were treated like speculative capital.
The Forman Law Firm, P.C. has a proven history of successful representation of clients against brokerage firms and investment advisors who have violated rules or responsibilities. If you believe you or a family member had a broker place your funds into investments that didn’t match your risk tolerance or retirement goals please contact our firm via our website www.formanlawfirm.com or call us at 512-306-8188.