FINRA Sanctions Network 1 Stockbroker For Churning
Donatas Belys Vildzius (also known as Donatas Vildzins and as Donatus Vildzins) of Danbury Connecticut a stockbroker formerly employed by Network 1 Financial Securities Inc. has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that Vildzius executed excessive trades in customer accounts at Network 1. Letter of Acceptance Waiver and Consent No. 2017055157601 (Oct. 9, 2020).
According to the AWC, from August of 2015 to April of 2017, quantitatively unsuitable trades were effected in the accounts of Network 1 Financial Services customers RR and GN. Trades had been recommended by Vildzius and had been executed without any objection by the customers. FINRA noted that Vildzius controlled the customers’ accounts.
The AWC stated that a short-term active trading strategy had been used by Vildzius. This strategy encompassed transactions in which securities were purchased and sold only to be repurchased and resold again. This caused high cost-to-equity ratios and turnover rates leading RR and GN to experience losses.
The AWC stated that customer RR maintained a growth objective and had a moderate risk tolerance. The customer’s account contained an annual cost-to-equity ratio of 41.3 percent and an annualized turnover rate of 4.58 because of Vildzius’s trading. This caused the customer to experience losses while Vildzius made more than $7,493.00 in fees and commissions. The stockbroker also excessively traded in the account of GN who maintained a growth objective and who had a moderate risk tolerance like RR. The AWC stated that a cost-to-equity ratio of 50.6 percent and annual turnover rate of 6.42 led the customer to experience $26,694.00 in losses. Vildzius generated $25,956.00 in fees and commissions from GN.
The AWC stated that the trades effected by Vildzius were excessive and unsuitable based on the investment profiles of the customers. Vildzius’s conduct was violative of FINRA Rules 2010 and 2111.
This is not the first time that Vildzius has been sanctioned by FINRA for misconduct. The stockbroker was fined $9,000.00 and suspended for 30 days from associating with any NASD member based upon allegations of the stockbroker’s exercise of discretion without first acquiring written authorization from customers. The regulator also found that Vildzius made excessive or unsuitable trades.
Vildzius has been identified in four customer initiated investment related disputes containing accusations of his misconduct while he was employed by Wachovia Securities and PSI. FINRA Public Disclosure confirms that a customer filed an investment related complaint concerning Vildzius’s conduct where the customer sought unspecified damages supported by allegations that unauthorized transactions were executed in the customer’s account causing the customer to sustain losses on over-the-counter equities.
Vildzius is referenced in another customer initiated investment related written complaint in which the customer requested $8,000.00 in damages founded on accusations that mutual fund purchases and sales had failed to be suitable for the PSI customer. Another customer initiated investment related arbitration claim regarding Vildzius’s conduct was settled for $95,000.00 in damages based upon allegations that the customer’s account was churned and that unauthorized transactions were effected in the customer’s account when Vildzius was associated with Wachovia Securities and PSI.
Vildzius’s registration with Network 1 has been terminated as of May 14, 2019.