An individual formerly associated with several broker-dealers settled charges pertaining to brokerage account churning and excessive trading.
According to an uncontested Offer of Settlement ("Settlement"), from 2014 through 2020 the individual churned and excessively traded nine different accounts for seven customers in an effort to generate additional fee commissions. FINRA Enforcement stated that the individual exercised the same short-term transactions across all accounts, sometimes using margin, which caused the customers to pay approximately $1.6 million in fees and other trading costs while suffering $1.1 million in losses. In doing so, the individual generated $1.5 million in commissions for himself and the associated firms. FINRA Enforcement had alleged that the individual acted with intent to defraud his customers and did not consider their best interests when engaging in the trades.
According to the Settlement, the individual was found to be in violation of SEA Rule 10b-5, FINRA Rule 2020 ("Use of Manipulative, Deceptive or Other Fraudulent Devices"), FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade") and FINRA Rule 2111 ("Suitability") and as a result has been barred from associating with any FINRA member.
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