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Articles Posted in Churning

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Investment bank Sutter Securities has been served with a complaint by FINRA that it engaged in churning an elderly investor’s account. Former Sutter part-owner and CEO Keith Moore was also named in the complaint for making recommendations to the unnamed broker on behalf of this customer. FINRA’s complaint details how Sutter engaged in churning—excessive trading to generate higher commissions—that brought in $2.9 million in commissions to the firm. This figure represents 35% of the firm’s commissions during the period. The firm generated over $8 million in total commissions during the relevant period. The charges include violations of Regulation Best Interest by both Sutter and Moore, holding them responsible for allowing the broker to engage in excessive trading, failing to supervise the broker, and ignoring multiple warnings and red flags.Investment bank Sutter Securities has been served with a complaint by FINRA that it engaged in churning an elderly investor’s account. Former Sutter part-owner and CEO Keith Moore was also named in the complaint for making recommendations to the unnamed broker on behalf of this customer. Continue reading ›

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In a recent article on InvestmentNews, Silver Law Group founding attorney Scott Silver spoke about FINRA's decision to award $49.2 million to 102 investors with accounts with Worden Capital Management, LLC. The investors alleged that their accounts were fraudulently churned and excessively traded for commissions. The company and its founder, Jamie Worden, were found to have used the investor's money as “personal slush funds.” "At the end of the day, Axos served as the clearing firm for a notorious Wall Street boiler room,” Scott said. “Axos had full transparency into Worden’s business."  As the clearinghouse for all of Worden’s transactions, Axos knew what Worden was doing but did nothing to stop any activity they knew (or should have known) was illegal.  FINRA’s award stated that Worden Capital and its brokers were engaged "in egregiously unsuitable and excessive trading and churning, garnering over $16 million in commissions and fees while costing nearly all of [clients] out-of-pocket losses of over $12 million.”In a recent article on InvestmentNews, Silver Law Group founding attorney Scott Silver spoke about FINRA’s decision to award $49.2 million to 102 investors with accounts with Worden Capital Management, LLC. The investors alleged that their accounts were fraudulently churned and excessively traded for commissions. The company and its founder, Jamie Worden, were found to have used the investor’s money as “personal slush funds.” Continue reading ›

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The principals and others of the broker-dealer Reid and Rudiger have been sanctioned by FINRA in a disciplinary action. They are: Edward Joseph Rudiger Jr. (CRD# 2118724) Kelli A Mezzatesta (CRD# 4701170) Clifford Ronald Reid (CRD# 1905920) Marc Harrison (CRD# 1605568) All four were employed with Reid and Rudiger until 4/30/2026.  Of the four, Harrison has been in the industry the longest, starting in 1986. Reid began in 1989, with Rudiger entering the industry in 1992 and Mezzatesta beginning in 2009.The principals and others of the broker-dealer Reid and Rudiger have been sanctioned by FINRA in a disciplinary action. They are:

  • Edward Joseph Rudiger Jr. (CRD# 2118724)
  • Kelli A Mezzatesta (CRD# 4701170)
  • Clifford Ronald Reid (CRD# 1905920)
  • Marc Harrison (CRD# 1605568)

All four were employed with Reid and Rudiger until 4/30/2026.  Of the four, Harrison has been in the industry the longest, starting in 1986. Reid began in 1989, with Rudiger entering the industry in 1992 and Mezzatesta beginning in 2009. Continue reading ›

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Nicholas James Schiano (CRD# 4429212) a financial broker with 24 years of experience, was suspended from the securities industry by the Financial Industry Regulatory Authority (FINRA) following allegations of excessive trading for two senior clients. Schiano had been associated with Spartan Capital Securities, LLC in New York City for the past eight years. According to FINRA’s disclosure report, Schiano’s trading activity generated unusually high turnover rates and cost-to-equity ratios that exceeded established industry benchmarks.   Between September 2017 and March 2022, he executed 102 transactions for one client (Customer A), which resulted in significant losses while generating $45,515 in commissions.  For another client (Customer B), he executed 31 transactions from October 2017 through December 2018, producing comparable losses and $30,510 in commissions.  This level of excessive trading is defined as churning – a practice where brokers excessively buy and sell securities to generate commissions for themselves, rather than prioritizing the client’s investment interests.Nicholas James Schiano (CRD# 4429212) a financial broker with 24 years of experience, was suspended from the securities industry by the Financial Industry Regulatory Authority (FINRA) following allegations of excessive trading for two senior clients. Schiano had been associated with Spartan Capital Securities, LLC in New York City for the past eight years. Continue reading ›

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Joseph Jemel Steward (CRD# 3241331) a financial broker with 20 years of experience, has been suspended from the securities industry by the Financial Industry Regulatory Authority (FINRA). The suspension followed allegations that he engaged in excessive and unsuitable trading that was not in the best interest of his customer. Steward most recently worked at PHX Financial, Inc. in Richmond Hill, New York, where he was employed for three years. According to FINRA disclosures, the customer routinely relied on Steward’s advice and followed his recommendations, giving Steward de facto control over the account.  His trading activity generated a high turnover rate and a cost-to-equity ratio exceeding accepted industry thresholds.Joseph Jemel Steward (CRD# 3241331) a financial broker with 20 years of experience, has been suspended from the securities industry by the Financial Industry Regulatory Authority (FINRA). The suspension followed allegations that he engaged in excessive and unsuitable trading that was not in the best interest of his customer. Steward most recently worked at PHX Financial, Inc. in Richmond Hill, New York, where he was employed for three years. Continue reading ›

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Stewart Ginn (a/k/a Stewart Taylor or Paxton Ginn Jr.), who is the owner of Paxton Financial Services, has been a broker Independent Financial Group, LLC since 2015. In 2023 Ginn was suspended by FINRA after FINRA found that Ginn “excessively traded five customers’ accounts” even though “[n]one of the five customers was an aggressive investor” and “three of the customers were retired seniors,” resulting in millions of dollars in losses. According to the Financial Industry Regulatory Authority (FINRA), such misconduct violated FINRA Rules and Regulation Best Interest. As a result, Ginn was suspended from acting as a FINRA broker for 18 months, was fined $50,000, and was ordered to pay restitution of $115,000 plus interest.Stewart Ginn (a/k/a Stewart Taylor or Paxton Ginn Jr.), who is the owner of Paxton Financial Services, has been a broker Independent Financial Group, LLC since 2015. In 2023 Ginn was suspended by FINRA after FINRA found that Ginn “excessively traded five customers’ accounts” even though “[n]one of the five customers was an aggressive investor” and “three of the customers were retired seniors,” resulting in millions of dollars in losses. Continue reading ›

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San Diego, CA-based Independent Financial Group, LLC has been fined and censured by the SEC after the firm failed to establish and follow a supervisory system for supervising the firm's brokers when handling customer accounts. This failure occurred between July 2020 and December 2022 and included noncompliance with Registration Best Interest and other requirements. During the same time frame, IFG failed to supervise one broker that churned, or excessively traded, five customer accounts and violated FINRA Rules 3110 and 2010. From September 2022 through April 2024, IFG also made “late and incomplete responses” to a FINRA Rule 8210 request violating FINRA Rules 8210 and 2010.San Diego, CA-based Independent Financial Group, LLC has been fined and censured by the SEC after the firm failed to establish and follow a supervisory system for supervising the firm’s brokers when handling customer accounts. This failure occurred between July 2020 and December 2022 and included noncompliance with Registration Best Interest and other requirements. Continue reading ›

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Minnesota-based broker-dealer Principal Securities has been sued by a local nonprofit over allegations of churning in variable annuities by one of its former registered representatives. The company disclosed this information in its recently filed annual focus report with the SEC. Principal Securities is also the subject of a separate FINRA arbitration claim based on the actions of the same representative. The plaintiff in this case is the Legacy of Angels Foundation, a 501 (c)(3) nonprofit and private family foundation with the mission, “To improve the lives of children by working to promote the expansion of newborn screening, and to further education, awareness, and research for Krabbe disease and Cystic Fibrosis to provide a better treatment and a cure.”  In June 2023, the nonprofit became known as the Rosenau Family Research Foundation.   In the lawsuit, the plaintiff alleges that Principal Securities made unsuitable recommendations, failed to supervise, and forfeiture of fees and commissions collected by the representative. The representative was not named in the report. The company expects losses in this case to be between $3 million and $5 million. The report was filed with the SEC on February 28, 2024.Minnesota-based broker-dealer Principal Securities has been sued by a local nonprofit over allegations of churning in variable annuities by one of its former registered representatives. The company disclosed this information in its recently filed annual focus report with the SEC. Principal Securities is also the subject of a separate FINRA arbitration claim based on the actions of the same representative. Continue reading ›

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