Securities Lawyers Blog
According to the records kept by the State of Florida, Office of Financial Regulation brokerage firm J.P. Turner & Company, L.L.C., (JP Turner) was sanctioned (Administrative Proceeding: 0757-S-12/13) concerning allegations that the firm’s broker, John McGriskin (McGriskin) engaged in mutual fund switching, a form of churning, in client accounts.
From December 2002, until May 9, 2013, McGriskin was an associated person of JP Turner and worked out of the branch located in Palm Coast, Florida, in his home. According to Florida, McGriskin typically purchased Class A shares for his clients. Class A shares of mutual funds come with high front-end sales charges. Florida found that McGriskin sold Class A shares of one mutual fund company and used the proceeds to purchase Class A shares of another mutual fund company resulting in McGriskin’s clients being subject to additional front-end sales charges on those transactions.
In addition, many mutual fund families offer “breakpoint” discounts for total investment amounts equaling certain minimum thresholds across multiple funds with the same fund family. However, Florida found that McGriskin made six mutual fund switching transactions which were not in the same mutual fund family or issuer from August through December of 2010, thirty-six mutual fund switching transactions which were not in the same mutual fund family or issuer in 2011, thirty-seven mutual fund switching transactions which were not in the same mutual fund family or issuer in 2012, and thirty-six mutual fund switching transactions which were not in the same mutual fund family or issuer from January through May of 2013.
In total, Florida alleged that McGriskin made approximately 115 switching transactions which were not in the same mutual fund family or issuer from August 2010 through May 2013. On May 9, 2013, McGriskin resigned from JP Turner while under internal review for questionable mutual fund trading activity. Because of this activity, Florida found that JP Turner failed to supervise McGriskin’s trading activity during this period.
According to BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker McGriskin entered the securities industry in 2002. After leaving JP Turner, McGriskin was registered with Sigma Financial Corporation for only one month in May 2013. Thereafter, McGriskin has been registered with Berthel, Fisher & Company Financial Services, Inc. (Berthel Fisher).
Investors who have suffered investment losses due to churning activity may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors concerning securities violations. Our consultations are free of charge and the firm is only compensated if you recover.