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.
All but one of the individuals named in the FINRA Complaint have left Newport Coast and, with one exception, are now registered with other firms. As such, their activities in the industry, and any penalties to be assessed against them, are still regulated by FINRA.
Silver Law Group has successfully recovered multi-million dollar awards for its clients in a wide variety of investment fraud cases throughout the country. If you have questions about your legal rights, or have been the victim of investment fraud, contact Scott L. Silver to discuss your legal matter in a free consultation. CONTACT: Silver Law Group, 11780 W. Sample Road, Coral Springs, FL 33065; Telephone: (800) 975-4345 (Toll Free); Web site: www.silverlaw.com; E-mail: firstname.lastname@example.org.