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Articles Tagged with Meyers Associates

Churning-1024x683-300x200The U.S. Securities and Exchange Commission has accused Emil Botvinnik of taking $3.7 million in a fraudulent scheme involving excessive, high-frequency trading. On November 7, 2018, he asked a New York federal judge to toss the suit because he claimed its allegations do not meet the pleading standard for fraud.

The claims against Botvinnik state that he wrongfully used his clients’ accounts while he was employed at Meyers Associates LP. However, Botvinnik denies these claims and he stated that there are no specific allegations that proves his clients were the type of unsophisticated investors who would not benefit from high-frequency trading. He also stated that his clients may only have been simply unaware of the trading strategy and its risks.

The SEC said that from June 2012 until November 2014, Botvinnik solicited five customers to open securities trading accounts for which he claimed he would employ a profitable trading strategy. He then implemented the strategy of frequent, short-term trades that forced significant costs and commissions on the investors. For example, the accounts would have had to reach an annual return of between 31 and 150 percent just to pay off the transaction costs that built up from the trading strategy. This type of trading is frequently referred to as churning.

If you watch your brokerage account regularly, you’ll see the various trades and charges that go along with them. But if you’re seeing transactions that you don’t recall authorizing, and you’re spending a lot more money for fees, commissions and other related charges, it’s time to ask questions. Our South Florida FINRA arbitration attorneys can answer those questions.

David-Sullivan-Accused-of-Excessive-Trading-on-More-Than-One-Occasion-300x200Broker Emil Bottvinnik (CRD #4359481) has been charged by the SEC with doing just that very thing. On September 7, 2018, the SEC charged Botvinnik with excessive trading and “churning,” or frequent, short-term trading. This kind of quick-turnover trading paid more in commissions that a client would make from his or her investment.

The SEC alleges that Bottvinnik opened accounts for at least five individuals, and concealed information about what they would be charged for these frequent tradings. Many of these customers were at or near retirement age, and lost $2.8 million for his clients while making commissions of $3.7 million in “ill-gotten gains.” These tradings are alleged to have taken place while was employed with Meyers Associates L.P. in Miami Beach, Florida, from 06/19/2012 through 11/17/2014. Meyers Associates was expelled by FINRA on 5/29/2018.

Meyers Associates, L.P. changed its name in 2016 from “Meyers Associates, L.P.” to “Windsor Street Capital, LP.”

Under the moniker Meyers Associates (CRD# 34171), the firm was known for hiring brokers whose FINRA BrokerCheck reports were riddled with disclosures.  According to an InvestmentNews report in 2014, Meyers Associates “stands out as a haven for registered representatives with black marks on their employment histories.”

According to that InvestmentNews report, about 12% of registered securities professionals have some type of disclosure event on their records.  The percentage of registered representatives with disclosure events at Meyers Associates was five times higher than the industry average.  Additionally, according to the report, of the 63% of the firm’s brokers with disclosure on their BrokerCheck reports, the average amount of disclosures was 4.5 per broker.

The SEC announced charges against New York-based brokerage firm Windsor Street Capital (CRD# 34171), formerly Meyers Associates, L.P., for gatekeeper failures related to a pump-and-dump scheme.  John D. Telfer (CRD# 1099745) was also charged as chief compliance officer and anti-money laundering officer of Windsor Street Capital from November 2013 to his separation from the firm in September 2016.

According to the SEC complaint, Windsor Street Capital (“Windsor Street”) violated Section 5 of the Securities Act after it facilitated the unregistered sale of hundreds of millions of penny stock shares without performing adequate due diligence regarding the Section 5 compliance of the shares.

The penny stock companies were MedGen, Inc.; Alternaturals, Inc.; Manzo Pharmaceuticals, Inc.; and Solpower, Inc.  According to the complaint, Windsor Street Capital failed to file suspicious activity reports for $24.8 million in suspicious transactions, including those occurring in accounts controlled by microcap stock financiers Raymond H. Barton and William G. Goode, who were separately charged.

Silver Law Group is investigating Meyers Associates broker Matthew A. Siliato (CRD# 5062153) for recent allegations that he recommended clients unsuitable investments.

Siliato’s Financial Industry Regulatory Authority (“FINRA”) BrokerCheck report indicates that the broker has nine misconduct disclosures.

Siliato’s most recent complaint was filed on June 23, 2016.  The customer dispute alleges unsuitable recommendations and damages in the amount of $250,000.  The complaint is currently pending.

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