WestPark Capital and veteran advisor David Levinson recently found themselves under scrutiny following a customer complaint seeking $400,000 in damages—an event proving that even decades of experience cannot always shield against legal or reputational risks. The filing, submitted in November 2025, revolves around the recommendation of alternative investments to a client by David Levinson, raising essential questions about advisor suitability, transparency, and fiduciary duty within the financial services sector.
The Allegation: When Alternative Investments Backfire
According to the complaint, David Levinson—who was affiliated with WestPark Capital at the time—recommended two specific vehicles: Delaware Statutory Trusts (DSTs) and investments in MacKenzie Realty Capital. DSTs are real estate structures commonly used in tax-deferred 1031 exchanges, enabling individuals to invest in large-scale property deals without direct responsibility for management. Marketed for their convenience and tax advantages, DSTs can still carry complex risks—especially if investors lack the liquidity or risk profile needed to weather market changes.
The client’s complaint alleges that the advice provided was unsuitable for their financial situation, emphasizing that investment suitability is not a box-checking exercise but a regulatory cornerstone, enforced by both FINRA and the SEC. The concern is not whether an investment looks promising on paper, but whether it matches an investor’s ability to absorb loss, meet liquidity needs, and reach specific financial goals.
Unpacking the Risks: Alternative Investments and the Importance of Due Diligence
Investments like DSTs and private real estate funds frequently appear in regulatory action lists. Why? Compared to traditional equities or mutual funds, alternative investments commonly involve:
- Limited liquidity—difficult to sell in emergencies
- High management and acquisition fees
- High minimum investment thresholds
- Risks related to real estate markets and interest rates
The complaint against David Levinson not only alleges unsuitability, but also points to misrepresentation of material facts—critical information that a reasonable investor would need to make informed decisions. Questions outlined in the complaint include whether David Levinson thoroughly explained the risks, disclosed all costs, and realistically framed the potential for both gains and losses. The complaint further alleges that these disclosures fell short, undermining the trust the client placed in their advisor.
Additionally, the investor asserts that David Levinson was negligent—implying a failure to perform the due diligence expected of a prudent advisor, or possibly ignoring red flags present during the investment review process. Most severely, the complaint suggests a breach of fiduciary duty, meaning that if Mr. Levinson recommended investments for personal incentive (such as higher commissions) rather than the client’s interests, he violated trust and regulatory expectations.
What Does the Data Say About Advisor Misconduct?
Investor concerns are not unfounded; a notable Forbes study found that roughly 7% of financial advisors have misconduct records. Advisors with a prior complaint are up to five times more likely to offend again compared to their peers with spotless backgrounds. Data from the Financial Advisor Complaints database underscores the importance of transparency, not only for regulatory compliance but for investor protection. According to the SEC, annual investor losses from advisor fraud and negligence number in the billions—often stemming from overlooked suitability checks or undisclosed conflicts of interest.
| Misconduct Case Type | Percentage of Advisors | Typical Investor Loss ($) |
|---|---|---|
| Unsuitable Investments | 40% | 150,000 |
| Lack of Disclosure | 35% | 200,000 |
| Negligence | 15% | 110,000 |
These figures highlight why it is vital for investors to ask about compensation, fees, risk, and alternatives—especially with alternative, complex, or illiquid products.
Who Is David Levinson (CRD# 705929)?
David Levinson has built a long-standing career since entering the securities industry 45 years ago. His professional path includes serving at more than a dozen firms, including American Trust Investment Services, Chicago Capital Management Advisors, WestPark Capital, Newport Coast Asset Management, and National Securities Corporation. He is based in Lisle, Illinois, and as of December 2025, maintains registration as a broker with American Trust Investment Services and as an investment advisor with Chicago Capital Management Advisors.
His credentials span all core industry exams:
- Securities Industry Essentials Examination (SIE)
- Series 7: General Securities Representative Examination
- Series 24: General Securities Principal Examination
- Series 63: Uniform Securities Agent State Law Examination
- Series 66: Uniform Combined State Law Examination
With registrations spanning 43 states and previous affiliations with prominent companies such as Smith Barney Harris Upham & Company, Wedbush Morgan Securities, and National Securities Corporation, David Levinson has been a notable presence in the field. Prior to this complaint, David Levinson’s regulatory record was clear—no previous customer complaints, arbitrations, or regulatory actions.
Regulatory Framework: FINRA Rule 2111 and Regulation Best Interest
Financial advisors like David Levinson are bound by a strict regulatory framework. FINRA Rule 2111—the Suitability Rule—requires all brokers to ensure that any recommendation made to a client is appropriate for their particular financial profile. Suitability encompasses three components:
- Reasonable-basis suitability: Advisors must properly understand products before recommending them.
- Customer-specific suitability: Recommendations must fit individual client needs and objectives.
- Quantitative suitability: Transactions should not be excessive in frequency or size relative to client portfolios.
Since 2020, Regulation Best Interest (Reg BI) has further heightened the standard, requiring recommendations be made in the retail client’s best interest—factoring in risks, costs, and the existence of better alternatives. When products like DSTs are on the table, it falls to the advisor to probe deeper: Does the investor understand the risks? Can they bear a potential loss? Was every fee or commission disclosed?
As noted by Warren Buffett, “Risk comes from not knowing what you’re doing.” Inadequate disclosure can create costly risks not only for clients, but for advisors and their firms as well.
Consequences for Advisors and Key Takeaways for Investors
If the pending complaint against David Levinson leads to a finding of liability, possible consequences include financial penalties, censure, suspension, or even a bar from the securities industry. Firms such as WestPark Capital may also be liable for the actions of registered representatives under the legal doctrine of “respondeat superior.”
Ultimately, the key lesson for investors is to remain vigilant:
- Research your advisor’s background and history on BrokerCheck.
- Ask thorough questions about how products work and how advisors are compensated.
- Request written explanations of fees, risks, and liquidity constraints.
- If a recommendation feels unclear or mismatched to your goals, seek a second opinion from a reputable source, such as
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