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Invest Securities Consulting in The News

Douglas J. Schulz, Financial Planning, October 7, 2024

A three-person Financial Industry Regulatory Authority panel hit Stifel on Thursday with a $14.3 million award over a complaint regarding a troubled broker's recommendations of complicated investment vehicles known as structured notes. These notes are a type of debt security often offering high returns but also often coming with substantial risks and fees. The bulk of the order against Stifel consists of $9 million in punitive damages — an amount one industry expert called proportionally one of the largest such awards he's ever seen. Douglas Schulz, a securities expert and the president of Invest Securities Consulting, said it's rare for arbitration panels to provide punitive damages in the first place and doubly unusual for the amount to be so large. "Clearly, the arbitration panel thought there was liability, and the wrongdoing was egregious," Schulz said… Schulz said the $9 million in punitive damages is the kind of award that can be used to show firms that neglectful and possibly deceitful practices aren't tolerated. Arbitrators, he said, too often shy away from large penalties for fear that the industry will seek to bar them from serving on future panels. "It's about time," Schulz said. "This has got to happen more often because it's the sort of thing that could help force the industry. For some firms, even a $9 million punitive damage doesn't register. But if you get more of these, they could add up to something."

Douglas J. Schulz, Financial Planning, June 13, 2024

Well Fargo was hit with an award that consisted of $81,885 in compensatory damages, $250,000 in punitive damages, $8,475 in costs, $150,000 in attorney’s fees and $5,000 for witness fees…“Douglas Schulz, a securities [expert] and the president of Invest Securities Consulting, said punitive damages in FINRA arbitrations cases are extremely uncommon. So the panel in this dispute clearly thought the alleged violations were serious. “Rare isn’t even the right word’, Schulz said. ‘So good for the arbitration panel members for taking a stance when somebody violates the rules and beaks the California code and letting them have it.’”

Douglas J. Schulz, Financial Planning, January 2, 2024

According to FINRA, LPL failed to ensure that its representatives were properly logging their business dealings, resulting in 830,000 transactions not being adequately recorded between January 2012 and August 2019. The firm also stood accused of failing to collect clients' profile information — data needed to gauge whether any possible investment recommendation is actually suitable — for $2 million trades. Douglas Schulz, a securities lawyer and the president of Invest Securities Consulting, said the fines seem vastly disproportionate to FINRA’s allegations against LPL. It would almost be easier, Schulz said, to list the rules that LPL wasn’t accused of breaking rather than those that it was. “If the ultimate goal is the protection of investors, I tend to go to the top, and the top is the regulators”; Schulz said. “And when I see this much wrongdoing for this many years before someone says anything, then I’m very critical of FINRA.”

Douglas J. Schulz, Financial Planning, July 20, 2023

One of the cases highlights how financial exploitation of older Americans amounts to as much as $28 billion each year. But they both underscore why investors should be skeptical of any vehicle requiring them to move assets off platforms subjected to regular scrutiny by firms and regulators to outside entities controlled by an individual broker, according to fraud expert Douglas Schulz of Invest Securities Consulting. A “day and age of widespread fraud” requires constant diligence, whether investing online or with a financial advisor, Schulz said. “I would say it's as bad today as I’ve ever seen it. The scamsters are very good. They're very smart,” Schulz said in an interview. “It’s rampant, and the regulators — you can't rely on them.” “They don't just fleece one person, they take down a bunch,” Schulz said. “You catch them, and they don't have any money. The net result is horrible. Yes, you can try to sue the advisory firm and the brokerage firm and we win maybe half those cases. But we don't win them all because the argument is, ‘Well the broker hid it from us, too.’”

Douglas J. Schulz, Financial Planning, June 29, 2023

Douglas Schulz, the president of Invest Securities Consulting, said the case shows how easy it is for sales representatives to move on from a firm that that’s under regulatory scrutiny. “Here we go again”, he said. “You catch them, and you disclose the entity they worked for. But you don’t really do anything about the people who were in control. So what’s the point? What did you accomplish?”

Douglas J. Schulz, Financial Planning, May 11, 2023

Douglas Schulz, the president of Invest Securities Consulting and a longtime FINRA arbitrator, said DeGregorio, given his past, should have caught regulators attention earlier. “It has always been a given that a broker who switched broker-dealers regularly, in two years or less, that is an absolute red flag”, Schulz said. “And the firms hiring a guy who by definition had a checkered past should have been asked: Why are you hiring someone who switches firms more often than I change my underwear?

Douglas J. Schulz, Financial Planning, March 22, 2023

Regulators and law enforcement authorities have “made abuse of seniors/elders major priority” in recent years, said fraud expert Douglas Schulz of Invest Securities Consulting in Westcliffe, Colorado. “It is a priority, it should be a priority and there are numerous bad actors who target seniors.”

Douglas J. Schulz, The Wall Street Journal

In the Wall Street Journal both Mr. Manson (arbitration scheduled for late October 2018) and Mr. Dielman are cases where I am/was the Claimant’s securities expert. I’m especially proud of the Dielman case (Mr. Dielman and his wife, in addition to being wonderful people, Chris is one of the more famous lineman in NFL history) because we received a $1.1 million award and I was the sole expert for the Claimants where the Respondents had 3 experts! Additionally, I think you will agree that the $1.1 million award is quite an accomplishment considering that my client made $3.7 million in his account.


Douglas J. Schulz, Financial Planning, 2021

“You find the products that pay the highest commissions and you'll find the products where most of the abuses occur,” said fraud expert Douglas Schulz of Invest Securities Consulting. UIT’s have "always been a problem," he said, because clients have trouble with all the different types of fees collected upfront, during the investment and at the end. “It's almost impossible for them to really figure out and know what are the charges and potential charges,” Schulz said.


Douglas J. Schulz, Wall Street Journal

“Being an accredited investor does not today make you wealthy, and it absolutely does not make you sophisticated, said Douglas Schulz, a former investment adviser who testifies in arbitrations for investors."


Douglas J. Schulz, New York Times

"That he (Johnny Burris, JP Morgan) was the subject of three complaints is significant, because that is a threshold at which a broker may be subjected to “heightened scrutiny” by regulators. Most brokerage firms won’t consider hiring a broker with three or more such complaints, no matter what the disposition, according to Douglas J. Schulz of Invest Securities Consulting. “It’s a very serious black mark,” he (Douglas Schulz, Invest Securities Consulting) said."


Douglas J. Schulz, Albuquerque Journal

Rosenstiel’s securities expert Douglas Schulz concluded that Decades had “neither the expertise or experience in how to deal with diversifying and hedging” such a large concentrated asset. For Decades to say there are no damages to the estate, “is like trying to take credit for the sun coming up in the morning because you happen to be on your porch watching,” he wrote in a report.


Douglas J. Schulz, Denver Post

“Schwab would like everyone to think that it does not have conflicts, but that’s not totally true,” says Douglas Schulz, expert witness in security fraud trials and author of Brokerage Fraud.”


Douglas J. Schulz, Forbes

“If you don’t have a contract, there’s no fiduciary relationship, and you’d have a much bigger up-hill battle,” says Douglas Schulz, Co-Author Of The Book Brokerage Fraud.


Douglas J. Schulz, Money Magazine

“The settlement represents pennies on the dollar compared to the $7 trillion that U.S. stock markets have lost from their peak,” said Douglas Schulz, of Colorado Springs, a former stock broker who now serves as an expert witness in securities fraud cases. “The investigations, which are ongoing, should make it easier for thousands of investors seeking restitution for the losses they suffered,” said Schulz, co-author of “Brokerage Fraud: What Wall Street Doesn’t Want You To Know.”


Douglas J. Schulz, Denver Post:

Schulz, author of Brokerage Fraud, said, “Brokerage firms have lost credibility in light of wide-spread media reports of fraudulent and reckless conduct and that has heightened the skepticism of arbitrators.”


Douglas J. Schulz, Lawyers Weekly USA:

“They’re (Internet brokerage firms) learning at the public’s expense and that’s not right”, says securities expert Douglas J. Schulz, from Invest Securities Consulting, Inc. of Westcliffe, Colorado, who has accounts at six different firms.


Douglas J. Schulz, Business Weekly:

“Investors often have a better chance of winning a margin dispute if the firm made some additional representation or misrepresentation, such as incorrectly telling the customer that there is no margin call or giving the customer time to meet a margin call and then liquidating the stock before the deadline.”


Douglas J. Schulz, Wall Street Journal:

“The marketing campaigns by these internet brokers encouraged novice investors, who had no business trading securities, to short-term trade stocks, and in many instances ended up losing a major of their net worth.”


Douglas J. Schulz, Wall Street Journal:

“What was the basis for recommending the stock? What materials did you rely on?”


Douglas J. Schulz, 
The American Lawyer:

“If a big guy with lots of money and a good education can win, then the opportunity for justice is strengthened for the small guy.”


Douglas J. Schulz, The Sun Sentinel, Florida:

“Should you cut your losses and bail out? First, take a look at the partnership’s quarterly and annual reports. If a partnership’s distributions exceeds its income, all it’s doing is paying out capital and you’re probably better off getting out.”


Douglas J. Schulz, Kiplinger’s Personal Financial Magazine:

“The chairman of the panel halted the proceedings and ordered the investor into the hallway—without his lawyer—to try to reach a settlement with the brokerage representative…”


Douglas J. Schulz, Money Magazine:

“They’re thumbing their noses at the SEC.”



Douglas J. Schulz, Business Week:

“For Schwab to be portraying itself as totally conflict free is somewhat misleading—they have many of the same conflicts as the big houses.”


Douglas J. Schulz, Institutional Investor:

“If you don’t see why I’ve called certain investments highly risky, I’ll explain. For example, suppose a broker sold you a bond by telling you his firm has cornered the market in that issue. Sound interesting? It might mean only that the issue is thinly traded and hard to unload except on gullible customers.”


Douglas J. Schulz, Medical Economics:

“That the payment system was not disclosed is a whole new area of fraud,” said Douglas Schulz, a securities expert who has participated in investigations into the firm’s sale of limited partnerships in the late 1980’s and who has testified on behalf of plaintiffs in the case. “The big question now is will the U.S. Attorney General or the SEC open the books back up on Prudential.”


Douglas J. Schulz, The New York Times:

“Just because you’re rich, doesn’t mean that you know anything about investment markets,” said Douglas Schultz, head of Invest Securities Consulting, Inc. in Dallas, who testified as an expert witness in the case. “The securities regulations are not socialistic, they apply regardless of your wealth.”


Douglas J. Schulz, The New York Times:

“$2.6 million dollar award, The message being sent by this and other awards is: You can’t abuse investors’ accounts and then use as a defense the fact that they are wealthy.”


Douglas J. Schulz, The New York Times:

“$2.6 million dollar award, The message being sent by this and other awards is: You can’t abuse investors’ accounts and then use as a defense the fact that they are wealthy.”


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Securities Expert Witness | FINRA Arbitration Expert Witness

Where Expertise and Experience Meet!

Welcome to the home page of Douglas Schulz, a nationally recognized securities expert witness and the President of Invest Securities Consulting, Inc. Mr. Schulz is a Certified Regulatory Compliance Professional (CRCP) who has been retained in over 1,175 securities related matters. Mr. Schulz has testified in over 650 FINRA Arbitrations and civil cases regarding investment and brokerage disputes that have resulted in arbitration awards and settlements totaling over $383 million dollars.

FINRA Securities Arbitration Expert Witness and Consultant

Douglas J. Schulz, CRCP

Invest Securities Consulting , Inc.
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Today’s securities industry and securities fraud have become progressively multifaceted and complex. The new generation of securities violations, schemes, and securities fraud truly necessitate expert testimony. A securities expert witness’s testimony has become vital in reaching a successful resolution in securities arbitration today.

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Douglas J. Schulz has co-authored a book with Tracy Pride Stoneman, distinguished securities lawyer about the brokerage industry. The book, was reviewed in the February 11, 2002 issue of Business Week Magazine! “The imperative to be a skeptical investor is a lesson most of us learn the hard way. That’s why you might do a favor for any friends who still use a stockbroker by giving them Brokerage Fraud: What Wall Street Doesn’t Want You to Know (Dearborn, $24.95). The authors, battle stockbrokers for a living. . . . they make enough of a case to get even very trusting investors to (wisely) think thrice about any broker’s advice”.

Mr. Schulz was a featured speaker at a November 2010 Wharton School of Business, FINRA Institute’s CRCP, Certified Regulatory Compliance Program. The program and dinner was to celebrate the 10 year anniversary of the FINRA/Wharton program and honor some of their more distinguished graduates. His topic, how securities experts work with compliance professionals and regulators. He was one of the very first graduates of the CRCP program, graduating in September 2001.
Schulz, a nationally known speakers along with such famous investment executives such as John Bogle of Vanguard. The conference was sponsored by the Delaware Securities Commission to help educate investors. Additionally, Mr. Schulz conducted a course for the Delaware Securities Commission’s regulatory investment team.

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