Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Jerome Messana (Messana), currently associated with Aegis Capital Corp., has been subject to at least 2 disclosable events. These events include 2 customer complaints. Several of those complaints against Messana concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $300,000.00 on July 19, 2024.
From approximately 1/2009 – 10/2021 customer claims suitability, churning, unauthorized trading, failure to supervise, fraud & misrepresentation (Violations of Securities Law), unjust enrichment, lost opportunity damages, punitive damages and unsuitable use of margin. Note that the customer does not specify any trade dates or products so the dates the account was opened was provided along with the general type of securities purchased and sold.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $470,000.00 on October 04, 2023.
Time frame: September 2021 to September 2023. Claimant alleges unsuitable use of margin, unauthorized trading and excessive trading.
When brokers engage in churning, or excessive trading, they often rapidly buy and sell securities, sometimes even the same stock repeatedly, within a short span of time. Often times the account will completely “turnover” every month with different securities. The sole purpose of this kind of investment trading activity in a client’s account is to generate commissions that benefit the broker, not the investor. Securities regulators consider churning to be a distinct form of investment fraud. The fundamental aspects of the claim involve excessive securities transactions, the broker’s undue influence over the account, and an intention to defraud the investor for illegal financial gain. 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 shown 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.
Messana entered the securities industry in 1980. Messana has been registered as a Broker with Aegis Capital CORP since 2021.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.
