Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Debra Bourne (Bourne) has been subject to at least five customer complaints during her career. Bourne is formerly employed by First Standard Financial Company LLC (First Standard Financial) and National Securities Corporation (National Securities). The majority of the customer complaints against Bourne concern allegations of high frequency trading activity also referred to as churning.
In April 2019 a customer complained that Bourne violated the securities laws by alleging that the financial advisor engaged in unsuitable and excessive trading causing $2,000,000 in damages. The claim is currently pending.
In March 2019 a customer complained that Bourne violated the securities laws by alleging that the financial advisor engaged in unsuitable trading, excessive trading, breach of fiduciary duty, and negligence among other claims alleged. The claim seeks $300,000 in damages and is currently pending.
In February 2019 a customer complained that Bourne violated the securities laws by alleging that the financial advisor engaged in unsuitable and unauthorized trading causing $668,000 in damages. The claim is currently pending.
When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time. Often times the account will completely “turnover” every month with different securities. This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades. Churning is considered a species of securities fraud. The elements of the claim are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.
According to newsources, a study revealed that 7.3% of financial advisors had a customer complaint on their record when records from 2005 to 2015 were examined. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and criminal cases. In addition, research has show a disturbing pattern with troublesome brokers where brokers with high numbers of customer complaints are not kicked out of the industry but instead these brokers are sifted to lower quality brokerage firms with loose hiring practices and higher rates of customer complaints. These lower quality firms may average brokers with five times as many complaints as the industry average.
Bourne entered the securities industry in 1999. From November 2008 through March 2014 Bourne was associated with Oppenheimer & Co. Inc. From March 2014 until April 2016 Bourne was registered with National Securities. From March 2016 until May 2019 Bourne was registered with First Standard Financial out of the firm’s Red Bank, New Jersey office location.
At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to excessive trading and churning violations. Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.