INVESTORS: Former Dempsey Lord Smith broker Joseph Patrick Roop is facing a customer dispute alleging improper recommendations and suitability issues.
Joseph Patrick Roop (CRD#: 2774470) was registered as a broker with Dempsey Lord Smith from 2019 until 2021. Previously, Roop was registered as a broker with Kalos Capital from 2009 until 2019.
Roop has twelve disclosures on his BrokerCheck report. One customer dispute filed against Roop was closed with no action taken.
December 2021 Regulatory Judgment
Initiated By: North Carolina Securities Division
Allegations: The Securities Division alleged violations of 18 NCAC 06A .1414(a) for failure to maintain proper records, making one or more trades without a proper power of attorney, and receiving commission for one or more trades for out-of-state customers. The Securities Division further alleged a violation of N.C. Gen. Stat. §78C-18(d) and 18 NCAC 06A .1703 for failure to timely update the U-4 with an OBA for a business that was non-operation.
Resolution: Settled through Consent Order
Sanction: Civil and Administrative Penalty(ies)/Fine(s)
Broker Comment: Mr. Roop chose to settle this action in order to avoid further delay of registration. The Penalty was $12,500 and the Investigative Costs were $82,500, for a total payment of $95,000.
August 2021 Customer Dispute
Allegations: Clients filed a complaint with the state of North Carolina alleging Improper Recommendations and Suitability issues.
May 2021 Customer Dispute
Allegations: Unsuitable Investments, Breach of Contract Failure to supervise, breach of fiduciary duty
Settlement Amount: $14,999.00
December 2020 Customer Dispute
Allegations: Unsuitable and overconcentrated recommendations
Damage Amount Requested: $500,000.00
Settlement Amount: $25,000.00
Broker Comment: As the owner of the practice I was required to use a joint representative number on all business written by a registered representative in my practice. I did not meet with or provide recommendations to this client.
January 2020 Customer Dispute
Allegations: Mr. Roop failed to conduct reasonable due diligence and recommended an investment strategy comprised of speculative and unsuitable securities pursuant to material misrepresentations and omissions offered by Cottonwood and GPB Capital Holdings, LLC
Damage Amount Requested: $65,000.00
Settlement Amount: $17,500.00
Broker Comment: Kalos Capital, Inc. determined as a business judgment that it was in the firm’s best interests to resolve the dispute rather than incur the time, disruption, and legal expenses associated with a protracted arbitration proceeding.
October 2018 Customer Dispute
Allegations: Clients allege unsuitable investments and sale of securities by a rep that was not properly registered in the State of Alabama. Approximate time period of all investments was January 2011 – July 2014.
Damage Amount Requested: $100,000.00
Settlement Amount: $90,000.00
January 2014 Customer Dispute
Allegations: Customers allege misrepresentation and omission of material facts and excessive trading from December 2004 to May 2008. Damages are not specified.
Settlement Amount: $25,000.00
Broker Comment: I have not been given a copy of the allegations, so have no response at this time.
August 2010 Customer Dispute
Allegations: Clients opened account in 2002 with Roop and during the course of their five year relationship, Roop was at three firms (Legg Mason, Banc of America, and Wachovia). Client alleges negligent misrepresentation, fraudulent misrepresentation, fraud in the inducement, unsuitability, breach of contract, and breach of fiduciary duty. Roop denies all allegations.
Damage Amount Requested: $750,000.00
Settlement Amount: $135,000.00
Broker Comment: During the time I worked with these customers, they maintained accounts that consisted of consolidated individual stocks. The risks of large individual holdings were discussed at regular meetings with customers. Additionally, mutual funds, closed end funds and options were also in their account. We communicated in person and via phone. Meetings were held at their home and occasionally also included their CPA. When the market was most volatile in 2008, weekly meetings occurred with the customer where they were updated on market and accounts. All paperwork was completed and approved by branch manager. Additionally, the branch manager also made calls to the customers to verify their knowledge of accounts. ***Wells Faro Advisors settled for $52,500. Bank of America still pending.*** ***Bank of America settled for $135,000.***
October 2009 Customer Dispute
Allegations: Client claims unsuitable equity products during the period 01/2005 to 07/2008. Damages unspecified.
Settlement Amount: $38,000.00
Broker Comment: During the time I worked with [Customer] he maintained accounts that consisted of stocks, bonds, closed-end funds, mutual funds, and options. We had regular reviews in person several times a year. We corresponded over phone on a regular basis to discuss his accounts, income, and investment performance. While at BAI my mgr [other firm employee] also spoke to [Customer] re: his accounts and risk tolerance, [Customer] has not alleged any specific improprieties but only complains his account value declined.
February 2009 Customer Dispute
Allegations: Client alleged unsuitable options trades placed in his account. Damages unspecified but believed to exceed $5000 (07/18/2008 – 01/20/2009)
Settlement Amount: $85,000.00
Broker Comment: Proper forms and disclosures were in place & approved by Tim Bershea (BOM). No communication or correspondence was requested of J.P. Roop at any time regarding complaint. Client requested acct transfer to a different Wachovia broker in Birmingham, AL in Oct. 2008 to be closer with his CPA. All transactions were done at the full knowledge, consent, and understanding of the client. Phone calls to Wachovia by J.P. Roop requesting information regarding this complaint and its status were never taken or returned.
December 2008 Customer Dispute
Allegations: Market crash in 2008 caused large losses to client’s portfolio. Customer cliamed she was unaware of risk.
Damage Amount Requested: $137,703.00
Settlement Amount: $56,000.00
Broker Comment: From the time of the complaint all of the proper disclosures and forms were in placee. Wachovia never requested any information from me even after I asked what they may need from me to help defend the complaint. I was never part of or asked to be involved in any discussions about this case.
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