According to FINRA, Doron Kochavi (CRD #1011155), based in La Canada, California, was sanctioned on January 16, 2024, through a Letter of Acceptance, Waiver and Consent (AWC). Kochavi was fined $10,000 and suspended from association with any FINRA member firm in all capacities for two months.

FINRA found that Kochavi caused his member firm to make and preserve inaccurate books and records by mischaracterizing securities transactions in a customer's accounts as unsolicited when they were actually solicited by him.

The distinction between solicited and unsolicited transactions is a fundamental aspect of securities regulation. A solicited trade is one where the broker recommends or suggests the transaction to the customer, while an unsolicited trade is one initiated by the customer. This distinction matters greatly for regulatory purposes because solicited trades carry additional suitability obligations for the broker. When a broker recommends a trade, the broker must have a reasonable basis to believe that the recommendation is suitable for that particular customer based on their investment profile, financial situation, and objectives.

By marking solicited trades as unsolicited, a broker effectively circumvents these suitability requirements and creates a false record that could make it more difficult for regulators to identify patterns of unsuitable recommendations. It also makes it harder for the firm to properly supervise the broker's activities and fulfill its own compliance obligations.

Accurate books and records are a cornerstone of securities regulation. FINRA and the SEC rely on these records to monitor broker conduct, investigate complaints, and protect investors. When a broker causes a firm to maintain inaccurate records, it undermines the entire supervisory framework designed to keep markets fair and protect the investing public.

For investors, this case offers an important reminder to review trade confirmations carefully. Each confirmation should indicate whether the trade was solicited or unsolicited. If you notice that a trade you did not initiate is marked as unsolicited, or if a trade your broker recommended is marked the same way, this could be a red flag worth bringing to the attention of the firm's compliance department. Investors should always feel empowered to ask questions about their account activity and to verify that the records associated with their accounts are accurate.

The suspension was in effect from February 5, 2024, through April 4, 2024 (FINRA Case #2021071099403).