In April, we brought you the story of Kelly Althar, a broker who received a permanent ban from the Financial Industry Regulatory Authority (FINRA). Here is additional information that explains why FINRA made this ruling.
While working for the Financial West Group, Althar reportedly began making investments for an elderly client who started with $308,000. Between April of 2011 and March of 2014, FINRA states that Althar made several investments for the express purpose of generating commissions. This unethical practice is known as churning. In fact, Althar is reported to have bought, sold, and then repurchased the same security in just a small timeframe.
In December of 2012, Althar reportedly bought 700 shares of a real estate investment trust (REIT) and then just two months later, sold them for a loss of $261. After another two months, almost 800 shares of the same REIT were repurchased. Six weeks later, FINRA reports that Althar sold them, this time for a loss of over $8,100. Those trades netted Althar more than $3,000 in commissions.
In addition, although the client was near retirement and only interested in low-risk investments, Althar ignored these instructions. The broker instead is reported to have bought risky securities in a development company that ended up being about 60 percent of the total value of the client’s portfolio.
In total, Althar’s alleged actions cost the client $187,000 while generating commissions that added up to almost $100,000. And this wasn’t the first time Althar was charged with excessive trading. In 2014 the former broker was accused of that, along with making unsuitable investments. That case eventually was settled, with the client receiving damages.
What Althar did is potentially considered elder financial fraud, which is much more common in the securities industry than you may realize. Older people are often targeted by unscrupulous brokers and financial advisors. And in many cases, it isn’t reported because people are embarrassed or think that they have no recourse.
If you or perhaps an older family member was the victim of fraud or activities forbidden by the securities industry, it’s nothing to be ashamed of – and you may be able to recover lost money. To find out how, just get in touch with the elder financial fraud attorneys at the Silver Law Group for a free consultation. Our attorneys are leaders in the field of securities arbitration and elder financial fraud committed by unethical brokers and financial advisors. We represent individual and institutional investors across the United States who have lost money at the hands of a trusted financial advisor. Our services are provided on a contingency-fee basis, which means we are only compensated if there is a recovery of losses.
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