Churning

Churning, Other Allegations Made Against Broker Michael Doyle

February 18, 2016 | Silver Law Group

Churning, Other Allegations Made Against Broker Michael Doyle on silverlaw.com

After 7 complaints and millions in settlements, Doyle is suspended by FINRA

According to a FINRA BrokerCheck report, Michael Doyle has received complaints from seven clients and was suspended for failing to comply with an arbitration award and to respond to the FINRA’s request to provide information concerning the status of compliance.

The complaints against Doyle date back to March of 1998 when a customer alleged that her account was churned in relation to stock option trades. In addition to this complaint, numerous others would continue to be made against Doyle over the 17 years that followed.

FINRA Permanently Bars NY Broker Rasheed Adams After Allegations of Churning

January 10, 2016 | Silver Law Group

FINRA Permanently Bars NY Broker Rasheed Adams After Allegations of Churning on silverlaw.com

Excessive trading leads to $57K in commissions and $37K in losses for investors, among other allegations

In August of 2015, FINRA permanently banned New York financial advisor Rasheed “Richard” Adams from associating or engaging with any firm associated with FINRA after allegations of excessive trading were filed. Adams also failed to provide required FINRA information and paperwork related to these allegations and his investment activity. Adams allegedly gained a commission of approximately $57,000, while his customers lost approximately $37,000.

According to the FINRA complaint, Mr. Adams worked with Caldwell International Securities between 2011 and 2015, which is when these churning activities were alleged to have occurred. Previously, he was registered with PHD Capital (2010-2011) and E1 Asset Management Inc. (2002-2010). He is not currently registered with any FINRA member firm.

Equinox Securities Company and Staff Charged With Fraud Scheme

December 9, 2015 | Silver Law Group

Equinox Securities Company and Staff Charged With Fraud Scheme on silverlaw.com

The firm, as well as its president and CCO, are charged with alleged churning, excessive trading and unsuitable recommendations

Equinox Securities, as well as President Steven Michael Oliveira and CCO Chris Blaine Palkowitsch, were all charged by the FINRA Department of Enforcement in a specific complaint about allegations of excessive churning of customer accounts and excessive trades, in addition to making unsuitable recommendations for customers.

Churning occurs when a broker repeatedly buys or sells securities in a customer’s account in order to generate commissions from those sales without any benefit to the customer. Purchases that don’t appear directly necessary to the customer’s investment goals may be classified as churning and can lead to a FINRA investigation.

Stifel Nicolaus & Co.’s Michigan Broker Kenneth Hornyak Permanently Barred By FINRA

October 9, 2015 | Silver Law Group

Michigan broker Kenneth Hornyak (“Hornyak”)(CRD# 2990144), was permanently barred by the Financial Industry Regulatory Authority (“FINRA”) and is no longer licensed to act as a broker, or otherwise associate with firms that sell securities to the public. Hornyak is barred from association with any FINRA member in any capacity.

According to FINRA, while employed as a broker at member firm Stifel, Nicolaus & Co., Inc. (“Stifel Nicolaus”), Hornyak exercised discretion in a client’s account without written authorization from the client. In January 2014, Stifel Nicolaus discharged Hornyak based on those allegations for violating firm policy. FINRA further alleged that Hornyak engaged in unauthorized trading and unsuitable short-term trading in Unit Investment Trusts (“UIT”). FINRA requested on-the-record testimony from Hornyak, however, Hornyak refused to comply and failed to appear for that questioning. As a result of his failing to cooperate with an investigation, FINRA permanently barred Hornyak from the financial industry. Hornyak consented to FINRA’s findings while neither admitting nor denying the allegations against him.

Hornyak was employed as a registered representative by Stifel Nicolaus from March 2006 through January 2014. Prior to that, Hornyak was employed in Purchase, New York by Morgan Stanley, Inc., from January 1998 through March 2006. According to FINRA, Hornyak’s CRD shows several customer complaints against him accusing Hornyak of securities violations including excessive trading (“churning”), unsuitable investments and unauthorized trading. He was also the subject of two employment terminations for cause (one as noted above). Furthermore, customers have settled disputes against Hornyak in the amounts of $90,000, $50,000 and $10,000.

Antonio Costanzo Permanently Barred by FINRA After Alleged Churning in Customer Accounts

October 9, 2015 | Silver Law Group

Broker failed to respond to FINRA information requests after allegations of excessive trading in numerous customer accounts

After 19 years in the securities industry, Antonio Costanzo has received a permanent bar from FINRA from acting in the capacity of a broker or other financial adviser, according to the FINRA website. The sanction, levied in May, came after a 2014 allegation that Costanzo was involved in churning, or excessive trading, in several customers’ accounts while employed at Newport Coast Securities.

Churning is, unfortunately, a common form of stockbroker misconduct in which a financial adviser makes excessive trades in an account in an effort to generate greater commissions without actually benefiting the customer. In fact, the buying and selling activity involved in churning is unsuitable to the investor’s goals and serves no practical purpose to the investor but generates substantial commission for the stockbroker.

SEC Reiterates Oil and Gas Fraud Investor Alert

October 9, 2015 | Silver Law Group

Alert lists red flags and best practices for avoiding fraud

A relatively recent increase in fraud schemes involving oil and gas ventures has caused the Securities and Exchange Commission to issue an investor alert that educates investors by bringing to their attention the possibility of fraudulent endeavors and the warning signs they should be aware of.

The alert, originally posted in May 2013, is still relevant today, as the SEC recently announced charges in regards to an oil and gas scheme in California involving upwards of $12 million from more than 300 investors nationwide. <This would be a good place for an internal link to the other blog on Schumacher>

Florida Broker Peter Gouzos Banned by FINRA

September 18, 2015 | Silver Law Group

His most recent employing firm was expelled by FINRA in October

After 22 years in the securities industry, FINRA permanently barred Peter Gouzos in February from acting as a broker or selling securities to the public. The final straw in a career full of customer dispute disclosures was his alleged failure to respond to FINRA requests for information, according to FINRA reports.

Gouzos most recently worked for Hunter Scott Financial in Delray Beach, Florida, which FINRA expelled in October. Before that, he worked for Dawson James Securities in Boca Raton and Emerson Bennett & Associates in Fort Lauderdale. Earlier in his career, he worked at various firms in New York, New Jersey, Georgia and Missouri.

Broker Focus: Patrick Teutonico in the Spotlight for Unauthorized Transactions

July 22, 2015 | Silver Law Group

According to FINRA Teutonico failed to observe high standards of commercial honor.

According to the Financial Industry Regulatory Authority (FINRA) Broker Check website, broker Patrick Teutonico is once again in the spotlight. Over the course of 17 years in the securities industry, Teutonico has 10 disclosures to report.

To provide some background, brokers are required by FINRA – known as the industry watchdog – to disclose different types of events, from customer complaints to IRS tax liens, judgments and even criminal matters. As such, Teutonico has 10 on his record, many of which involve allegations of unsuitable and unauthorized transactions. According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records. Therefore, it would seem the number of disclosures by Teutonico is relatively high.

Silver Law Group Files Securities Arbitration Case Against Dawson James

May 29, 2015 | Silver Law Group

The Silver Law Group has filed a securities arbitration claim before the Financial Industry Regulatory Authority (“FINRA”) on behalf of a family and a family business from South America alleging, among other things, that Dawson James failed to properly supervise one of its registered representatives, permitted an unsuitable investment strategy to be utilized and permitted the family’s investment accounts to be excessively traded for the purposes of generating huge commissions for itself and its registered representatives while wiping out most of their customers’ investment capital in a very short period of time.

Excessive trading or “churning,” as it is known in the industry, is the act of a broker who excessively and needlessly engages in trading in a client’s account primarily to generate commissions for the broker on each trade without regard for the client’s financial well-being. Churning is an illegal and unethical practice that violates SEC rules and securities laws.

Dawson James Securities markets itself as a full service investment firm specializing in complex healthcare, biotechnology, technology, and clean-tech sectors. Headquartered in Boca Raton, Florida, the firm has been in operation since 2002. Dawson James has been the subject of several regulatory investigations, some which resulted in disciplinary actions by regulators. For example, FINRA recently censured and fined Dawson James $75,000 for failing to provide adequate supervisory procedures. FINRA found that during the review period the firm failed to investigate numerous “red flags” relating to the activities of one registered representative. Dawson James also failed to enforce its written supervisory procedures which specified that all electronic correspondence is reviewed on a daily basis. The firm has also been the subject of several customer FINRA arbitration claims.

Stockbroker Thomas Tedeschi and Broker-Dealer Aegis Capital Corp. are the Subject of Multiple Securities Arbitration Claims Against Them for Churning

May 14, 2015 | Silver Law Group

According to FINRA, Thomas Tedeschi has recently been named in a securities arbitration lawsuit against him and his former employer, Aegis Capital Corp., for making unsuitable investments, unauthorized trades, misrepresentations and excessive trading (churning), among other claims. The assertions against him involve speculative securities that include penny stocks and Exchange Traded Notes. Mr. Tedeschi is required by law to only recommend or engage in transactions that are suitable to their individual client, and not to excessively trade in their accounts. This type of trading may be considered stockbroker misconduct called churning. The excessive buying and selling is done for the purpose of generating commissions for the broker, and not to benefit the client. In fact, it almost always results in enormous losses to the client.

Thomas Tedeschi began his stockbroker career in 1994 and has been employed by 17 different brokerage firms since then, seven of which have been expelled from the brokerage industry by FINRA for violations of the law and misconduct. It is quite a shocking record. Additionally, Aegis Capital Corp. has many claims against it, including 17 final regulatory violations that were filed by FINRA, NASDAQ Stock Market, and other regulatory bodies, for such violations as market manipulation, excessive buying and selling of illicit microcap stocks, failure to supervise and failure to disclose, late trade reporting, and other violations of NASD Rules and Texas Securities Acts as well. There is one regulatory violation claim currently pending. Aegis Capital Corp has also been fined on numerous occasions and has been suspended in the past from acting as a market maker.

If you invested money with Thomas Tedeschi or Aegis Capital Corp. and suffered losses, you may be entitled to recover some or all of those investment losses. Please call our securities law firm toll free at (800) 975-4345 to speak with an experienced attorney and to find out how we may be able to help you regain some or all of your investment losses. Most cases are handled on a contingent fee basis, meaning that you do not pay legal fees unless we are successful in your lawsuit.