excessive trading

Broker Investigation: Excessive Trading Claims Against Broker John Fenimore

February 20, 2016 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker John Fenimore (Fenimore). According to BrokerCheck records Fenimore has been the subject of at least two customer complaints. The customer complaints against Fenimore allege a number of securities law violations including that the broker made unsuitable investments and churning (excessive trading) among other claims.

The most recent customer complaint filed in June 2014 and alleged unsuitable recommendations and excessive trading from January 2010 through April 2014 claiming $250,000 in damages. The claim is still pending. In April 2013, another client filed a complaint alleging Fenimore engaged in a reckless trading. The claim settled for $210,000.

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.

Broker Investigation: Customer Complaints Against McNally Financial Broker Marshall Cassedy

February 6, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Marshall Cassedy (Cassedy). According to BrokerCheck records Cassedy is subject to 17 customer complaints, 3 regulatory actions, and one employment separation. The customer complaints against Cassedy allege securities law violations that including unsuitable investments, churning (excessive trading), unauthorized trading, misrepresentations, and breach of fiduciary duty among other claims.

The most recent regulatory action was filed by the State of Florida in 2010 and alleged unauthorized trading and unregistered activity. Prior to that, Capitol Securities Management, Inc. terminated Cassedy alleging that the broker had customer complaints concerning violations of the firm’s policies with respect to the handling of their accounts. In 2006, the State of Georgia filed a regulatory action against Cassedy alleging that the broker failed to disclose another regulatory investigation by the State of Florida. That investigation was filed in 2005 and alleged unsuitable securities.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

Broker Spotlight: Customer Complaints Against National Securities Corporation Broker James Eichner

January 30, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker James Eichner (Eichner). According to BrokerCheck records there are at least 3 customer complaints that have been filed against Eichner. The customer complaints against Eichner allege a number of securities law violations including that the broker was negligent, breached a fiduciary duty, and churning (excessive trading) among other claims. The most recent customer complaint against Eichner filed in June 2015 alleges that Eichner breached his fiduciary duty and was negligent in the handling of the customer’s account leading to $500,000 in damages. The claim is currently pending.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

The number of customer complaints against Eichner is high relative to his peers. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints. In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters. However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck. More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.

Broker Spotlight: Customer Complaints Against Independent Financial Broker Brian Zimmerman

January 30, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Brian Zimmerman (Zimmerman). According to BrokerCheck records there are at least 5 customer complaints that have been filed against Zimmerman. The customer complaints against Zimmerman allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, failure to supervise, and churning (excessive trading) among other claims. The most recent customer complaint against Zimmerman filed in July 2014 alleges that Zimmerman breached his fiduciary duty, negligence, and misrepresentations in the handling of the customer’s account leading to $128,405 in damages. The claim is currently pending.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

The number of customer complaints against Zimmerman is high relative to his peers. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints. In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters. However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck. More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.

Morgan Stanley Broker Lance Slater Terminated After Allegations Of Personal Loans and Excessive Trading

January 18, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Lance Slater (Slater). According to BrokerCheck records there are at least 2 customer complaints against Slater and one employment separation. The most recent customer complaint against Slater alleges that from 2013 Slater borrowed $210,000 from the client and then tried to hide that fact from her children and has not since then paid the client back. The client also alleges that Slater engaged in unsuitable investments and excessive trading.

Shortly thereafter Morgan Stanley discharged Slater making allegations Slater failed to adhere to the firm’s guidance regarding certain sales activity and possible involvement in an unreported loan from a customer while at a prior firm.

As a background, 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.

Broker Investigation: Advisor Dennis Riordan

January 7, 2016 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating customer complaints against broker Dennis Riordan (Riordan). According to Riordan’s BrokerCheck records there are at least 3 customer complaints against Riordan, 1 judgment or lien, and 2 criminal matters. The customer complaints against Riordan allege a number of securities law violations including that the broker made unsuitable investments, excessive trading, and failure to follow instructions among other claims.

The most recent disclosure filed in February 2015 concerns a tax lien for $33,287. Tax liens and judgements are often a sign that the broker cannot manage their own personal finances and may be tempted to recommend high commission products or strategies to clients in order to satisfy debts. The most recent complaint against Riordan was filed in December 2013 and alleges an unsuitable recommendation in a private placement security.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

Gana LLP Investigation: Excessive Trading Complaints Against Broker James Bernthal

January 5, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker James Bernthal (Bernthal). According to BrokerCheck records there are at least 4 customer complaints against Bernthal and 1 judgments or liens. The customer complaints against Bernthal allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, excessive trading, and unauthorized trading, among other claims.

According to the disclosures, the most recent customer complaint against Bernthal was filed in February 2013 and alleged $100,000 in damages due to unsuitable trades and excessive transactions. The case was resolved for $50,000.

As a background, 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.

Broker Investigation: Wells Fargo Advisor Robert Giusti

January 3, 2016 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating customer complaints against broker Robert Giusti (Giusti). There are at least 4 customer complaints against Giusti and one civil action. The customer complaints against Giusti allege a number of securities law violations including that the broker made unsuitable investments, misrepresentations, negligence, and excessive trading among other claims.

The most recent complaint was filed in April 2015 and alleged unsuitable investments and excessive trading among other claims for investments made between 2010 through June 2015 causing the investor $1,326,374 in damages. A civil judgment was filed against Giusti in April 2015 for $1,100,000. Another complaint filed in January 2012 alleged unsuitable investments and unauthorized use of margin funds causing $45,000.

Giusti entered the securities industry in 1995. From November 2006 through June 2009, Giusti was associated with Citigroup Global Markets Inc. Thereafter, from June 2009 through September 2009, Giusti was briefly associated with Morgan Stanley Smith Barney. From August 2009 until December 2013, Giusti was associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated. Finally, since December 2013, Giusti has been registered with Wells Fargo Advisors, LLC out of the firm’s New York, New York office location.

Broker Investigation: Customer Complaints Against Frank Marinelli

December 8, 2015 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints against Frank Marinelli (Marinelli). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Marinelli has been the subject of at least 3 customer complaints, 1 employment termination, 2 judgment or liens, and 1 criminal matter. The customer complaints against Marinelli allege a number of securities law violations including that the broker made unsuitable investments, churning (excessive trading), misrepresentations, negligence, fraud, and unauthorized trading other claims.

The most recent customer complaint was filed in March 2014 and alleges unsuitable investments and churning causing $120,000 in damages. Another complaint filed in March 2012 alleges high pressure sales tactics unauthorized trading and mismanagement of the client’s account leading to $200,000 in damages.

Marinelli also has two liens listed, both filed in 2010 related to taxes. One lien is for $123,240 and the other is for $41,306. A broker with large liens are an important consideration for investors to weigh when dealing with a financial advisor. An advisor may be conflicted to offer high commission investments to customers in order to satisfy liens and debts that may not be in the client’s best interests.

FINRA Sanctions Daniel Barthole Over Attempt to Privately Settle a Customer Complaint

December 7, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2012034393401) against broker Daniel Barthole (Barthole) resulting in a monetary sanction and a suspension. In addition, according to the BrokerCheck records kept by FINRA, Barthole has been the subject of at least 2 customer complaints. The customer complaints against Barthole allege unsuitable investments, churning (excessive trading), misrepresentations, fraud, and unauthorized trading among other claims. The most recent complaint against Barthole alleged $227,632 in damages concerning unauthorized ETF trading and churning from February 2012 through September 2014. The claim was later withdrawn.

FINRA’s findings stated that Barthole consented to a finding that he together with two other brokers attempted to settle a customer complaint away from their brokerage firm by agreeing to pay $4,000 to a customer and by sending $1,500 in cash to the customer.

Barthole entered the securities industry in 2009. From April 2009 until February 2015, Barthole was associated with Woodstock Financial Group, Inc. Since February 2015, Barthole has been registered with National Securities Corporation out of the firm’s New York, New York office location.