According to FINRA, David Khezri was barred from association with any FINRA member in all capacities for refusing to provide documents and information requested by FINRA in connection with its investigation of whether he made unsuitable securities recommendations in customer accounts.

Khezri was found in violation of FINRA's rule requiring cooperation with regulatory investigations. FINRA initiated an investigation into whether Khezri made unsuitable securities recommendations to customers. Suitability is a fundamental obligation requiring registered representatives to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer based on the customer's investment profile, including age, financial situation, investment objectives, risk tolerance, and other relevant factors.

Unsuitable recommendations can take many forms, including recommending securities that are too risky for a customer's profile, excessive trading (churning), unsuitable concentration in a particular security or sector, or recommending complex products that customers do not understand. FINRA requested documents and information from Khezri to investigate whether his recommendations violated suitability requirements. This might have included customer account records, correspondence, order tickets, new account documents, and other materials showing the nature of Khezri's recommendations and customers' investment profiles.

However, Khezri refused to provide the requested documents and information, preventing FINRA from obtaining evidence necessary to evaluate whether his recommendations were suitable. This refusal obstructed FINRA's ability to protect investors by investigating potential suitability violations. The documents FINRA sought were likely in Khezri's possession or control, and he had an obligation to produce them regardless of whether they showed misconduct.

A bar for failure to cooperate in a suitability investigation is particularly significant because it suggests that Khezri may have had unsuitable recommendations to hide. Those with nothing to hide typically cooperate with investigations to clear their names. By refusing to provide documents, Khezri prevented FINRA from making findings about the underlying suitability allegations, but his failure to cooperate itself warranted removal from the industry. Investors should understand that individuals who refuse to cooperate with investigations into customer harm pose significant risks and do not belong in positions of trust.