Douglas J. Schulz

Invest Securities Consulting Inc.
301 Snowcrest Road
Westcliffe, CO 81252
Office: 719-783-3230
Fax: 214-853-9300
Introduction

Douglas J. Schulz has worked in the securities industry for 42 years. He has worked as a Securities Expert Witness for 34 years. He holds the highest certification by a securities regulatory body, (FINRA/Wharton School of Business); he is a Certified Regulatory Compliance Professional, CRCP. He has worked as a Registered Representative for such firms as Bear Stearns, Merrill Lynch and Investors Diversified Services (IDS). He has held numerous securities licenses and has also worked as a Registered Investment Advisor (RIA). Mr. Schulz has been a securities expert witness through his Company, Invest Securities Consulting Inc. which is based in southern Colorado. Invest has been hired to do financial investigative and due diligence work for brokerage firms, investment banking firms, publicly traded companies, individual investors, and merchant banking operations. Mr. Schulz has been involved in over 1,170 cases and has testified over 650 times. He has worked closely with regulators on numerous cases and has been an arbitrator for FINRA for 30 years. He co-authored a book Brokerage Fraud What Wall Street Doesn't Want You to Know. The book was favorably reviewed by BusinessWeek. Mr. Schulz has been quoted in almost every financial publication in the United States, and due to the popularity of his book was a regular guest on financial radio and television programs. He has been a prolific author of articles and treatises on securities regulation and securities arbitration. His website, www.securitiesexpert.com is very comprehensive, including articles, references and videos.
AREAS OF EXPERTISE
Securities Regulations, Municipal Bonds, Naked Options, Index Options, Covered Call Writing, FINRA Regulations, SEC and state securities regulations, FINRA Arbitration, Brokerage Firms, Registered Investment Advisor, Broker-Dealer rules policies and procedures, Online Broker-Dealers, Standards and Norms of the securities industry, 1933 Act, 1934 Act, Investment Advisors Act of 1040, Investment Advisers, RIA's, Securities Fraud, Investment Fraud, Stock Funds, Bond Funds, Selling Away, Margin and Margin liquidations, Insider Trading, Commissions, Online and Internet Stock Trading, suitability, churning, excessive trading, unauthorized trading, selling away, insider trading, day trading, order failure, damages, cryptocurrencies, Breach of Fiduciary Duty, Securities Fraud Investigations, Mutual Fund & Hedge Fund Mismanagement, Self-Dealing & Front-Running, Securities Fraud, Unauthorized Trading, Churning, Options, Stocks & Bonds, Compliance Violations, Supervisor of Registered Representatives, Supervisory Violations and Lapses, Due Diligence, Concentration - Lack of Diversification, Order Failure, Illegal Discretionary Trading, Broker Standard of Care, Broker/Brokerage Firm Malpractice or Malfeasance, Stockbroker Violations, Damage Calculations & Loss Analysis, Damages & Punitive Damage Analysis, Inconsistencies in Trading Activities, Breach of Securities Regulations, Improper Sales of Limited Partnerships and Private Placements, Compliance Obligations for Registered Investment Advisors, RIAs


Areas of Expertise
  • Finance
  • Financial Planning
  • Fraud Investigation
  • Litigation Finance
  • Lost Profits
  • Securities
  • Stocks & Bonds
  • White Collar Crime

Expert Background
Q: Please list your professional accreditations, degrees, licenses, and certificates granted:
A: LICENSES, COMPLIANCE & ARBITRATOR TRAINING

FINRA/NASD CRCP Certified Regulatory Compliance Professional
FINRA- Wharton School of Business (current)
NASD General Securities Principal (Series 24)
MULTI-STATE RIA Registered Investment Advisor
SEC RIA Registered Investment Advisor
CME & CBOT General Commodities (Series 3)
NASD General Securities Representative (Series 7)
NASD Multi-State Registered Securities Representative (Series 63)
NASD Investment Company Contracts (Series 6)
TEXAS Life and Disability Licensed Agent
TEXAS Variable Annuities and Life Insurance Licensed
TEXAS Accounting Fraud Training 1989 Austin
NEW MEXICO Advanced Criminal Investigation Course
TEXAS 1993 NASD Arbitrator Training
COLORADO 1997 NASD Arbitrator Training
COLORADO 1999 NASD Arbitrator Chairperson Training
COLORADO 12-2022 FINRA Arbitrator Chairperson Training
COLORADO 12-2022 FINRA Arbitrator Basic Training
COLORADO 12-2022 FINRA Arbitrator Training-Your Duty to Disclose
COLORADO 12-2022 FINRA Arbitrator Training – Discovery, Abuses, Sanctions
COLORADO 12-2022 FINRA Arbitrator Training -Civility in Arbitration
COLORADO 12-2022 FIRNA Arbitrator Training -Understanding the Prehearing Stage
Q: Please list your affiliations or memberships in any professional and/or industry organizations:
A: Phi Kappa Phi Honor Society
Q: Please list any teaching or speaking experience you have had, including subject matter:
A: PUBLICATIONS / SPEECHES

“Unauthorized Discretionary Trading 2020”, PIABA Bar Journal, Vol 27, No 1 (2020). This article updates my two previous articles on unauthorized trading in 1994 and 2001. I address the updated regulations, along with the current litigation issues on unauthorized trading. Special emphasis is given to broker-dealers’ boilerplate defenses to unauthorized trading claims.

“Securities Industry with Douglas Schulz” Investor Coaching Show, September 21, 2019, Paul Winker, Nashville

“Big Bad Giants”, Matson Money, Phoenix, AZ, appeared in the video and gave a speech to 450 Investment Advisors on the corruption of Wall Street, in March 2019

“Cryptocurrencies–Investment or Electronic Currency of the Future?”, co-author, PIABA Bar Journal Vol. 25, No. 1, 2018 and Computer & Internet Lawyer, Vol. 35, No. 11, November 2018

“Supervision of Third-Party/Power of Attorney Accounts”, co-author, PIABA Bar Journal Vol. 23 No. 2 2016

“Effective and Ineffective Arbitration Strategies and Presentations” Panel Speaker, PIABA Annual Securities Conference, October 2017

“Direct Examination of Securities Experts & Cross Examination of Opposing Experts” Michigan State Law School, Lansing Michigan, November 2015

“Swimming Naked When the Tide Goes Out - Naked/Short Options 2013”, PIABA Bar Journal Volume 20, No. 1 Page 75, Fall 2013

“Bonds & Bond Funds – The Next Wall Street Bombshell” April 2013, Invest Securities Consulting, Inc. www.securitiesexpert.com

“Due Diligence – Securities Applications and Regulatory Requirements 2011” PIABA Bar Journal, Volume 17 No. 4 2010/2011

“How Securities Experts Work with Compliance Professionals and Securities Regulators” Ten Years of CRCPs – Career Success and Advancement, Wharton Business School, Philadelphia, PA, November 2010

“The Use of Securities Experts in Litigation and Damage Calculations” Cornell Law School, Ithaca, NY, October 2009

“Navigating the Fog of Investing”, McGriff Publishing, 90-minute DVD documentary and Guest Speaker, 2006

“Unauthorized Trading & Mismarking Order Tickets – How Regulators Can Detect These Violations”, NASAA Winter Enforcement Conference; La Quinta, CA January 2005

“How Delaware Securities Investigators Can Spot Special Violations at the Branch Level”, Delaware Department of Justice Securities Division; Wilmington, DE, March 2005

“How Investors Can Spot Abuses in Their Brokerage Accounts”, 2005 Delaware Investor Education Conference Keynote Address, Wilmington, DE, March 2005

“Auditing Brokerage Branch offices – Red Flags, Supervision and Securities Violations” Slide show and presentation to the NASD Enforcement Department – Investor Protection, Washington D.C. This was a lecture for the training department for NASD top investigators with a focus on unauthorized trading, January 2004

“Cross Examining Expert Witnesses in Securities Arbitrations” PIABA Annual Conference, Carlsbad California September 2005

“How a Branch Office Manager Can Fail to Supervise His Branch Properly”, California Mid-Year Securities Arbitration Update - PIABA, Los Angeles, CA, March 2005

Brokerage Fraud – What Wall Street Doesn’t Want You to Know, co-author, Dearborn Publishing, 2002. The book addresses the rules and regulations of the securities industry and puts them in layman’s terms for the investing public. The book covers such subjects as the top abuses in the industry, the regulators, how to choose a stockbroker and how investors can navigate the investment markets.

“Flat Fees or Fat Fees” Practicing Law Institute (PLI) Securities Arbitration 2004; PIABA Bar Journal Fall 2003 The article discusses flat fee and wrap fee accounts of brokerages and why many times they are not in the best interest of investors.

“Margin Abuses & Concentration – The Failure to Diversify”, Publication and Presentation at the Mass Torts Made Perfect Securities Litigation Conference, Chicago IL, June 2003

“How to Keep Yourself out of Arbitration” Presentation to the Colorado Springs Merrill Lynch Branch office 2002

“Concentration – Too Much of a Good Thing” PIABA Bar Journal Vol. 9 No.2 Summer 2002 Co-author. The article discusses the various issues surrounding concentration within a portfolio and lack of diversification of investments by stockbrokers.

“How to Get the Most Out of Your Brokerage Account” – Presentation to the American Board of Trial Advocates, Mauna Kea Beach Hotel, Hawaii, November 2001.

“Unauthorized Trading, Time and Price Discretion & the Mismarking of Order Tickets” Practicing Law Institute (PLI) Securities Arbitration 2001, Publication and Presentation at seminar August 2001. The article addresses the regulations governing these three areas and how regulators, compliance individuals, lawyers, and arbitration panels can determine if violations have taken place. The article also suggests changes that are needed in the regulation of these infractions.

“No Duty – Does Suitability Apply to Internet Brokerage Firms?” Publication and Presentation at Public Investor’s Arbitration Bar Association, PIABA October 2000. The article addresses the position of Internet firms, such as E*TRADE, that they have no duties as it relates to “suitability” and the “Know Your Customer Rule”.

"Internet Market Orders Can be Dangerous" Published in The Colorado Springs Business Journal August 1999. The article discusses market and limit orders in volatile markets.

“An Additional Revenue Stream: The Second Opinion Business” Financial Advisory Services Alert, PPC (Practitioners Publishing Company) Advisor FAS Alert 1 July 1999. This article discusses how CPAs can create additional income by becoming Registered Investment Advisors.

"Problems with Internet Trading" Published in The Colorado Springs Business Journal June 1999. The article discusses many of the problems investors have trading with on-line brokerage firms.

"How Internet Trading Might Affect Your Business" Published in Practitioners Publishing Company's Financial Advisory Services Bulletin, February 2000. The article discusses the nuances of the Internet trading markets and how they will affect the business of money managers and investment advisors.

“Internet Trading - Take a Walk on the Wild Side”. Published in PLI’s Securities Arbitration 1999. The article addresses the booming market in Internet trading and the pitfalls and conflicts in trading at on-line brokerage firms, as well as the liability.

“The New NASD Arbitrator Selection System - NLSS”. Published in the Securities Arbitration Commentator, April 1999 Volume 10-6. The NLSS was a major change in the NASD arbitrator selection system. The article explains some of the finer points of NLSS and discusses the strategies, benefits and downsides of the new system.

“Risk Tolerance of Investors”. Published in Guide to Investment Advisory Services, Practitioners Publishing Company, 1999. (6-volume training manuals) Evaluating the risk tolerance of an investor is an essential part of an investment advisor’s practice. This training section of the manuals provides a framework to allow advisors to conquer such a historically complex task, and thereby make proper recommendations to their clients.

“Investors Level of Knowledge”. Published in Guide to Investment Advisory Services, Practitioners Publishing Company, 1999. (6-volume training manuals) This training section and the survey are tools designed to assist investment advisors to evaluate the investment knowledge of their clients.

“When Is An Order An Order? Unauthorized Trading by Securities Brokers”. Published in PLI’s Securities Arbitration July 1994, 1994. The article covers the discussions that must take place between a broker and the client, the order process, discretionary trading, and the arbitration of unauthorized trading claims.

“Damages in Limited Partnership Cases”. Published and presented at the PIABA Second Annual Meeting/Conference, October 1993. The article discusses the proper methods to calculate damages and lost opportunities, as well as the accompanying support documents.

“Arbitration of Limited Partnership Cases”. Published in the Securities Arbitration Commentator, February 1992. The article addresses the marketing of limited partnerships in the 1980s and the arbitration of securities claims.

“The Use of Expert Witnesses in Securities Arbitration”. Published in Securities Arbitration- Evaluation, Preparation, Presentation, April 1992. Mr. Schulz has also spoken on this subject at a number of national and regional securities seminars.

“Forced Arbitration - Perfect Justice? Discovery in Arbitration”. Published in the Securities Arbitration Commentator, co-author, November 1990. The article explores the problems attendant to discovery in arbitration and offers suggestions for change and for working within the system.

“Your Broker” Mr. Schulz co-authored a monthly article on the investment and brokerage industry for the Colorado Springs Business Journal.


QUOTED IN: (number of times)
Wall Street Journal (7), American Lawyer, Money Magazine (2), Newsweek, Forbes, New York Times (5), BusinessWeek (3), Kiplinger’s Personal Finance (2), Financial Planning (4), Dow Jones, The Street, Chicago Tribune, USA Today (2), Registered Representative, Complinet, The Boston Globe, Investment Advisor, Financial Times (London), Institutional Investor (2), Boardroom Inc., Medical Economics Journal (2), Sun-Sentinel, Times Record News, Dallas Business Journal, Dallas Morning News, Tampa Tribune, St. Petersburg Times, Colorado Springs Business Journal, The Denver Post (3), The Charlotte Business Journal, Philadelphia Inquirer, Upside, World Money Laundering Report (2), Richmond Business Journal, Rocky Mountain News, Bloomberg News, The Oregonian, Florida Today, AAII Journal, The Charlotte Observer, Lawyers Weekly USA, On Wall Street, St. Louis Business Show


APPEARED OR HEARD ON:
CNNFN “The Money Gang”; WNYW-TV FOX “Good Day New York; KTVK-TV “Good Morning Arizona”; KFNN-AM Phoenix; WEBFNTV “Ask the Experts”; KNX-AM (CBS) Los Angeles; Yahoo Finance Webcast; New York 1 Cable “Fortune Business Report” KUOW-FM Seattle, WSAR-AM Providence; WEIM-AM & WBIX-AM Boston;
NBC Bay Area News, San Francisco; WABJ-AM Toledo; KBEM-FM Minneapolis; WPTT-AM Pittsburgh; WXRC & WIRC Charlotte; WFTL & WORL Miami; KWIP & WEVL Poughkeepsie; KCMN-FM Colorado Springs, Powernomics Syndicated Radio; WMTR-AM “Your New Jersey Connection” KFAB-AM Omaha; KKTV Colorado Springs; KRDO Colorado Springs; CBS-WBBM Chicago “Noon Business Hour” (3)
Q: Have any of your accreditations ever been investigated, suspended or removed? (if yes, explain)
A: no
Q: On how many occasions have you been retained as an expert?
A: 1,170 Plus
Q: For what area(s) of expertise have you been retained as an expert?
A: Securities Regulations, Municipal Bonds, Naked Options, Index Options, Covered Call Writing, FINRA Regulations, SEC and state securities regulations, FINRA Arbitration, Brokerage Firms, Registered Investment Advisor, Broker-Dealer rules policies and procedures, Online Broker-Dealers, Standards and Norms of the securities industry, 1933 Act, 1934 Act, Investment Advisors Act of 1040, Investment Advisers, RIA's, Securities Fraud, Investment Fraud, Stock Funds, Bond Funds, Selling Away, Margin and Margin liquidations, Insider Trading, Commissions, Online and Internet Stock Trading, suitability, churning, excessive trading, unauthorized trading, selling away, insider trading, day trading, order failure, damages, cryptocurrencies, Breach of Fiduciary Duty, Securities Fraud Investigations, Mutual Fund & Hedge Fund Mismanagement, Self-Dealing & Front-Running, Securities Fraud, Unauthorized Trading, Churning, Options, Stocks & Bonds, Compliance Violations, Supervisor of Registered Representatives, Supervisory Violations and Lapses, Due Diligence, Concentration - Lack of Diversification, Order Failure, Illegal Discretionary Trading, Broker Standard of Care, Broker/Brokerage Firm Malpractice or Malfeasance, Stockbroker Violations, Damage Calculations & Loss Analysis, Damages & Punitive Damage Analysis, Inconsistencies in Trading Activities, Breach of Securities Regulations, Improper Sales of Limited Partnerships and Private Placements, Compliance Obligations for Registered Investment Advisors, RIAs
Q: In what percentage of your cases were you retained by the plaintiff?
A: 75%
Q: In what percentage of your cases were you retained by the defendant?
A: 25%
Q: On how many occasions have you had your deposition taken?
A: I have given sworn testimony over 100 times
Q: When was the last time you had your deposition taken?
A: The last time I gave sworn testimony and had my deposition taken was 2022, but both will happen again in January 2023
Q: On how many occasions have you been qualified by a court to give expert testimony?
A: Between 50 and 60 times in state or federal court. Over 600 times in arbitration.
Q: On how many occasions have you testified as an expert in court or before an arbitrator?
A: Between 50 and 60 times in state or federal court. Over 600 times in arbitration.
Q: For how many years have you worked with the legal industry as an expert?
A: 34 years
Q: What services do you offer? (E.g.: consulting, testing, reports, site inspections etc.)
A: SERVICES OFFERED
Invest Securities Consulting, Inc. through its President and securities expert witness Douglas J. Schulz offers numerous services relating to investments such as: Evaluation of possible breach of securities regulations and industry norms, compliance and supervisory violations and lapses; analyzing brokerage accounts as it relates to, commissions, churning, unsuitable investments, conflicts of interest, turnover analysis, cost analysis, evaluation of investment strategies utilized, damage analysis, comparative loss analysis; litigation support & consultation, discovery review & recommendations; testifying as a securities expert witness.
Q: What is your hourly rate to consult with an attorney?
A: I charge $600 an hour, for any and all work. I do an initial consultation for free.
Q: What is your hourly rate to review documents?
A: I charge $600 an hour, for any and all work. I do an initial consultation for free.
Q: What is your hourly rate to provide deposition testimony?
A: I charge $600 an hour, for any and all work. I do an initial consultation for free.
Q: What is your hourly rate to provide testimony at trial?
A: I charge $600 an hour, for any and all work. I do an initial consultation for free.
Q: Please list any fees other than those stated above (E.g.: travel expenses, copy fees, etc.)
A: I charge for travel expenses and travel time. Travel time does not start until I am at the airport at Colorado Springs, Colorado.


References

please see INVEST website for references https://www.securitiesexpert.com/professional-references.html Aside from references listed on my website, I provide a list of some of the top nationally-ranked securities attorneys in the country for serious inquiries. Here is a sample:
"Douglas, It has been my pleasure to have known you for about 15 years. During that period, I have come to develop a profound respect for your intellect, your integrity, and your overall generosity to charitable causes. You are a product of a wonderful and most impressive family heritage. You are a student of history, blessed with extraordinary writing and communication skills and a man of devout and the highest principles. Douglas may God continue to bless you all the days of your life. You are a wonderful role model for all of us.
Las Vegas, Attorney

November 2019
We could not have obtained the results we achieved without you as part of our team. And your pre-trial assistance in crafting cross examination of their witness and experts resulted in eliciting much testimony helpful to us and damaging to them. On damages, your analysis of our clients' accounts, through both your reports and your testimony, was instrumental in the panel's decision to award the compensatory damages. . . . you simplified and articulately explained our damage calculation in terms the arbitration panel could easily understand. That was clear when witnessing the lengthy back and forth between you and one of the arbitrators on the theory and measure of damages. Perhaps the most compelling proof of the value of your assistance was the award of your expert witness fee of $140,000. We both know that is a rare event in FINRA arbitration.

Very truly yours,
BREESE LAW OFFICE, PLLC
Frank “Kim” Breese, III


December 2018

. . . your testimony to the Panel was well-considered and, thus, helpful to it in its efforts to understand this case, what went wrong at the broker-dealer, and what should have been done by the firm to protect my clients and comply with its regulatory obligations. I just wanted to let you know that I appreciated the time and attention you gave to the engagement from start through to the end as that had a positive impact on the value of your testimony at the hearings. Among other things, the fact that the Panel Chair asked you candidly for your assessment of the claimant’s relative naiveite when none of the parties or counsel had touched on that issue directly, and the fact that the opposing party ordered copies of your book, indicated to me that your testimony was impactful.

Best personal regards,

Paul
Arizona Lawyer


Video
Navigating the Fog of Investing 2010 video of some of the top securities professionals in the country
Navigating the Fog of Investing Top financial experts discuss problems of Wall Street
Big Bad Giants Discusses some of questionable practices of stockbrokers and brokerage firms