churning

Published on: March 25, 2014

Clients of 3 Rockwell Global Capital Financial Advisors Seek Damages for Churning, Unsuitable Recommendations

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses as a result of doing business with Douglas Guarino, Lawrence Lee or Robert E. Lee and Rockwell Global Capital. The investigations are regarding fraud, unsuitable recommendations and churning that the three men allegedly conducted while registered with Rockwell Global Capital as financial advisors.

According to stock fraud lawyers, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Churning, on the other hand, is a form of broker misconduct in which the broker performs excessive trading to generate personal profit.

In addition, a firm has an obligation to properly supervise brokers and financial advisors while they are registered with the firm. If it fails in this duty, securities fraud attorneys say it may be held liable for customer losses. One Statement of Claim has already been filed with the Financial Industry Regulatory Authority against the firm, alleging that Douglas Guarino, Lawrence Lee and Robert E. Lee had churned a client’s account. The claim is seeking damages for excessive trading, churning, fraud and unsuitable recommendations.

Published on: November 19, 2013

BBVA Securities of Puerto Rico Ordered to Pay $1.2 Million to Investors

by InvestorLawyers

Securities fraud attorneys are currently investigating claims on behalf of investors who suffered significant losses as a result of the unsuitable recommendation of investments sold by BBVA Securities of Puerto Rico representatives. Reportedly, a Financial Industry Regulatory Authority arbitration panel recently awarded $1.2 million to claimants Felix Bernard-Diaz, Julian Rodriguez and Luz Rodriguez. The defendants in the hearing were BBVA Securities of Puerto Rico Inc., Rafael Colon Ascar, Jorge Bravo, Sonia Marbarak and Julio Cayere.

BBVA Securities of Puerto Rico Ordered to Pay $1.2 Million to Investors

The claimants asserted gross negligence regarding a naked option trading strategy that was allegedly unsuitable. In addition, they alleged breach of fiduciary duty, churning, margin use and excessive trading.

According to stock fraud lawyers, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Churning, on the other hand, is a form of broker misconduct in which the broker performs excessive trading to generate personal profit.

Published on: October 17, 2012

First Midwest Securities, Scott & Stringfellow Customers Could Recover Losses

by InvestorLawyers

Investment fraud lawyers are currently investigating claims on behalf of the customers of First Midwest Securities Inc. and Scott & Stringfellow LLC in light of recent fines and censures by the Financial Industry Regulatory Authority. Both firms were censured; in addition, First Midwest Securities was fined $75,000 and Scott & Stringfellow was fined $350,000. Both firms submitted a Letter of Acceptance, Waiver and Consent but did not admit or deny FINRA’s findings.

First Midwest Securities and Scott & Stringfellow Customers Could Recover Losses

In the case of First Midwest Securities, securities arbitration lawyers say FINRA’s findings indicated that the firm failed to provide an adequate supervisory system and enforce adequate supervisory procedures to prevent excessive trading and ensure the suitability of equity transactions. Furthermore, the firm allegedly failed to utilize exception reports that would help in detecting excessive and unsuitable trading. Instead, according to the allegations, the firm relied on turnover ratio reports and daily trade blotter reviews that were prepared manually. However, these reports failed to address accounts’ cost-to-equity ratios.

Investment fraud lawyers are also investigating claims against Scott & Stringfellow based on FINRA’s findings that indicated the firm failed to maintain an adequate supervisory system related to the sale of Non-Traditional ETFs, or Non-Traditional Exchange Traded Funds. In addition, the firm allegedly allowed the recommendation of a Non-Traditional ETF by its registered representatives to customers without performing adequate due diligence. FINRA stated that some of the firm’s customers received unsuitable recommendations of the investment. The firm’s supervisory system, according to FINRA, was not reasonably designed for compliance with applicable FINRA and NASD rules and did not provide adequate guidance, tools, or adequate formal training to educate the firm’s supervisors and registered representatives about these investments.