David Karandos, Formerly of Dinosaur Financial Group, Facing Pending Customer Disputes Alleging Unsuitable Investment Recommendations

Karandos has three pending customer disputes seeking over $900K collectively.

David Karandos (CRD#: 1934119) was registered as a broker with Dinosaur Financial Group from 2013 until 2019. Previously, Karandos was registered with Morgan Stanley from 2009 until 2012.

Karandos has twelve disclosures on his BrokerCheck report.

November 2020 Customer Dispute

• Status: Pending
• Allegations: By letter received November 19, 2020, counsel for client complained that Karandos placed client in unsuitable investments from 2014 to 2018 and improperly withdrew funds from other family accounts from 2016 to 2018.
• Damage Amount Requested: $436,000.00

November 2020 Customer Dispute

• Status: Pending
• Allegations: Allegations of unsuitable recommendation during October 2014 through May 2017.

May 2020 Customer Dispute

• Status: Pending
• Allegations: One customer alleges that Karandos placed him in unsuitable investments, including two private placements and life settlement viaticals, from 2013 to 2013. Other customer alleges that Karandos converted the proceeds of a viatical in or around 2016.
• Damage Amount Requested: $500,000.00

May 2018 Judgment / Lien

• Judgment/Lien Amount: $56,367.51
• Judgment/Lien Type: Tax

May 2015 Judgment / Lien

• Judgment/Lien Amount: $434,536.70
• Judgment/Lien Type: Tax
• Broker Comment: IRS has asked for additional information and said it should have an answer in June or July of 2015.

October 2013 Regulatory Judgment

• Status: Final
• Initiated By: State of Michigan
• Allegations: Karandos is summarily denied because he omitted information on his U-4 form related to a compromise with a creditor and his criminal history. He is the subject of an order issued by a state securities regulator and has engaged in dishonest or unethical practices in the securities and investment business within the previous 10 years.
• Resolution:  Order
• Sanctions: Denial
• Broker Comment: I did not intentionally omit any information on my U4. When an omission was brought to my attention my U4 was amended immediately.

September 2012 Financial Judgment

• Status: Final
• Type: Bankruptcy
• Disposition: Discharged
• Broker Comment: This bankruptcy is the direct result of Morgan Stanley terminating my contract and not being willing to restructure or forgive any of the $1,100,000 of debt from my sign-on bonus in 2008.

December 2011 Customer Dispute

• Status: Settled
• Allegations: Plaintiff, class member, alleges breach of fiduciary duty through unsuitable recommendations of volatile, high-risk and illiquid investments. 
• Settlement Amount: $313,564.64
• Broker Comment: UBS and Morgan Stanley both made settlements, however the dates are different as are the amount of the settlement. 

May 2011 Customer Dispute

• Status: Settled
• Allegations: Plaintiffs allege that between 2004 and 2008 Karandos breached fiduciary duties owed to the Indiana State Teachers Association (ISTA) by recommending and/or permitting the purchase of an excessive amount of alternative investments in ISTA’s investment portfolio.
• Settlement Amount: $493,000.00
• Broker Comment: The [customer] complaint was dismissed in early 2010. I have been told that the UBS settlement released me from any liabilities resulting from the period in which I was employed by UBS. I steadfastly deny all allegations and any wrongdoing. I was neither asked nor did I contribute to the UBS settlement. 

October 2010 Regulatory Judgment

• Status: Final
• Initiated By: Indiana Securities Division
• Allegations: By recommending to his client the placement of funds in alternative investment products (e.g. hedge funds, private equity funds, etc.) that were misrepresented as suitable to the client, the respondent engaged in unethical and dishonest practices, in violation of Indiana Law. By recommending the purchase of investments that were unsuitable to the client’s stated objectives, the respondent engaged in unethical and dishonest practices, in violation of Indiana law. By recommending and imposing an excessive and unreasonable advisory fee, the respondent engaged in unethical and dishonest practices, in violation of Indiana law.
• Resolution:  Settled
• Sanctions: Disgorgement
• Amount: $50,000.00
• Sanctions: Suspension
• Registration Capacities Affected: All Capacities in Indiana
• Duration: 75 Days
• Start Date: 3/1/2012
• End Date: 5/15/2012
• Sanctions: Karandos admits that from June, 2007, through December, 2008, he facilitated the sale of alternative investments to his client which exceeded the investment policy of his client.

August 2003 Customer Dispute

• Status: Settled
• Allegations: Unsuitable and unauthorized transactions
• Damage Amount Requested: $32,554.00
• Settlement Amount: $27,500.00
• Broker Comment: [Customer] complained to Merrill Lynch after I left to join UBS, about the suitability of her unsolicited acquisition of mutual funds. Merrill Lynch settled the claim for $27,500. I have steadfastly denied the allegations and was neither asked nor did I contribute to the Merrill Lynch settlement. 

April 2002 Criminal Disposition

• Charges: Count II – OVW/BAC/Prior Felony D.
• Disposition: Dismissed
• Amended Charges: Not Guilty – Dismissed
• Amended Charge Type: Felony
• Amended Charge: Dismissed

• Charges: Count 1 – Operating a vehicle while intoxicated/Prior Felony D.
• Disposition: Reduced
• Amended Charges: Guilty as Misdemeanor
• Amended Charge Type: Misdemeanor
• Amended Charge: Reduced

• Charges: Count I – Operating vehicle while intoxicated Count II – Operating vehicle while intoxicated with prior Count III – Public intoxication Count IV – Wrong way on one-way road
• Disposition: Count I – Guilty as Misdemeanor, Counts II, III & IV – Dismissed
• Amended Charges: Count I – Reduced to Misdemeanor
• Amended Charge Type: Misdemeanor
• Amended Charge: Count I – Reduced to Misdemeanor, License Suspended for 180 days, probation for 365 days and $134.55 court costs
• Broker Comment: Settlement agreement and criminal record included, no felony convictions. 

Contact Us Today

The Sonn Law Group is currently investigating allegations surrounding David Karandos. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.