Margin

FINRA Suspends Ryan Michael Murnane

May 25, 2018 | Silver Law Group

Broker Ryan Michael Murnane (CRD #4784140) has been suspended by FINRA for failure to provide requested information. The suspension was enacted on 02/12/2018. Since no action has been taken in the three-month period, the suspension has become a bar as of April 20, 2018. Murnane’s last employer of record was Alexander Capital LP (CRD #40077) of New York, NY, from 01/12/2017 through 04/03/2017. He is not currently registered with any broker-related firm.

Murnane’s previous employment history includes:

Woodstock Financial Group (CRD #38095), of Staten Island, NY, from 07/15/2015 through 02/07/2017. Murnane was discharged from this position; see details below.

Silver Law Group is Investigating Joseph Francis Valdini of Worden Capital Management LLC

May 14, 2018 | Silver Law Group

Silver Law Group is currently investigating Melville, NY based broker Joseph Francis Valdini regarding complaints pertaining to failure to provide due diligence to investor clients and placing unauthorized trades with subsequent margin call sellouts that caused major financial damages to investors.

Based on FINRA’s BrokerCheck report on Valdini, a FINRA complaint was filed on January 22, 2016 alleging that Valdini provided misleading information to investor clients during his employment at Worden Capital Management LLC. The total in damages alleged was $125,000 that was settled for $79,000. On January 18, 2016, there was also another claim filed during his employment at Worden Capital Management LLC that alleged damages of $28,125.60 related to unauthorized trading with margin call sellouts causing a loss of over $28,000 to one investor client. As a result of failing to cooperate in a FINRA investigation, Valdini has received a permanent suspension.

Valdini was previously employed at Worden Capital Management from 2014 to 2016 and at A&F Financial Securities, Inc. from 2008 to 2014. He has been employed at Aegis Capital Corp. from 2016 until his bar from the industry.

Margin Calls: The Dangers of High Risk

April 13, 2018 | Silver Law Group

If you’ve been investing for any length of time, you’ve probably at least heard of something called a “margin account” or a “margin call.” If you’ve never had this kind of account, don’t open one until you should do some careful research and understand exactly what it is. Even if your broker recommends it, if you don’t understand everything that’s involved, just say no. You can find out one day that your money is completely gone, sometimes in the blink of an eye.

A margin account is used to buy more securities than you would normally be able to, borrowing money from a brokerage in order to do so. It’s highly profitable for both brokerages and brokers, but may not be for you. It is, by many accounts, a “double-edged sword,” and not advised for anyone who isn’t a very skilled trader.

A broker or brokerage may open a margin account for you, in which you’ll deposit a sum of money as collateral. You may open one voluntarily, or it may be part of an agreement when you open an account. In either case, your broker is required to obtain your signature. You’ll also sign a margin agreement, which you must read carefully. Ask your broker questions about anything you don’t thoroughly understand before you sign it.

Silver Law Group Files FINRA Arbitration Claim Alleging Excessive use of Margin, High Commissions and Elder Financial Fraud on behalf of an Unsophisticated Retiree

February 7, 2018 | Silver Law Group

Silver Law Group, a law firm specializing in securities and investment fraud, has filed a securities arbitration claim with FINRA on behalf of an elderly investor alleging stockbroker misconduct and the unsuitable use of margin and excessive trading.

FINRA recently issued investor guidance highlighting “Purchasing on Margin, Risks Involved with Trading in a Margin Account.” FINRA describes the risks including the following:

You can lose more funds than you deposit in the margin account;

Margin Account Guidelines

February 8, 2016 | Silver Law Group

Margin Account Guidelines on slverlaw.com

Key Information to know before you get started.

While the potential gains associated with securities trading in a margin account may be substantial, so can the potential losses. This is critical for investors to understand, along with the facts and risks associated with this type of trading.

Simply put, a margin account is an account offered by brokerage firms that allows investors to borrow money to buy securities. The investor typically deposits 50 percent of the value of the purchase and the brokerage firm loans the investor the rest of the money, using the securities as collateral.

FINRA Hits Newport Coast Securities and Its Representatives with Churning Charges

August 14, 2014 | Silver Law Group

Last week, the Financial Industry Regulatory Authority (FINRA) filed charges against Newport Coast Securities, Inc. (“Newport Coast”) and some of its current and former registered representatives, accusing them of using margin and risky securities to artificially generate huge commissions for themselves while wiping out most of their customers’ investment capital.

Newport Coast, a New York-based broker-dealer, by and through brokers Douglas Leone, Andre LaBarbera, David Levy, Antontio Costanzo, and Donald Bartlet, allegedly churned the accounts of twenty four customers — many of whom are retirees — causing more than $1,000,000 in losses to the investor-clients. “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. The brokers are also purported to have created new account forms for their victimized clients that misstated the clients’ net worth, investment experience, and objectives; and two of the brokers (Levy and Costanzo) attempted to dissuade several customers from cooperating with FINRA’s investigation into the matter — all of which was done to cover up the illegality of the brokers’ excessive activity in the client accounts.

According to FINRA, former Newport Coast supervisors Marc Arena and Roman Luckey saw what was transpiring but took no meaningful steps to curtail the misconduct. To the contrary, the firm’s managers, supervisors, and the former President of the company allegedly profited through overrides on the churned accounts.

FINRA Investor Alert Warns Against Investing With Borrowed Funds

December 27, 2013 | Silver Law Group

FINRA, the securities industry watchdog, recently updated an Investor Alert for investors who purchase securities with “borrowed funds.” According to the alert, investments made with borrowed funds by investors grew substantially in 2013. Investors are warned that the risk of margin calls is significant and they should better educate themselves about these risks before investing with borrowed funds. Investors must understand investing with borrowed funds and the risks of a margin call, in the event, securities used as collateral decline in value. The risks investors should understand about margin calls include:

the forced sale of securities;
no prior notification required;