March 6, 2014 Comments (0) Blog, Securities Fraud

FINRA Awards suggest churning remains problem

Churning is a Problem in the Securities Industry, featured by Top Securities Fraud Attorneys, The White Law Group

FINRA Churning awards

Based on FINRA awards, it appears that churning continues to be a problem in the securities industry.  From January 1, 2013 to December 31, 2013, there were 52 cases decided that at least mentioned churning as an issue in the case.

Churning is an illegal and unethical practice that takes place when a broker or financial advisor excessively buys and sells a client’s securities to increase their own commissions.  Here is more information on how to prove a churning claim.

A summary of the awards that at least mentioned churning as an issue and where an award was entered in favor of the Claimant are as follows:

 

Case No. Claimant(s) Respondent(s) Award of Panel
12-01171 Paul and Patricia Loberg John Thomas Financial and Barry P. Pittmann Respondents, John Thomas Financial and Barry P. Pittman, are jointly and severally liable for and shall pay to Claimants, Paul and Patricia Loberg, the sum of $56,100.00 in compensatory damges.
11-02908 Virginia Larson National Securities Corporation and Mark Joseph Bruscianelli Respondents, National Securities Corporation and Mark Joseph Bruscianelli, are jointly and severally liable for and shall pay to Claimant, Virginia Larson, the sum of $100,000 in compensatory damages.
13-00131 Carlos Moroz  Raymond James & Associates, Daryl Devillier, and Vincent Petrangelo Respondentsd RJA, Devillier, and Petrangelo are jointly and severally liable for and shall pay to the Claimant compensatory damages in the amount of $39,802.69.
12-02526 Antone Araman and Maryann Araman Joseph Gunnar & Co., LLC and Fida F. Rahman a/k/a Frank Rahman Respondent Gunnar is liable for and shall pay to Claimants compensatory damages in the amount of $650,772.55 plus interest at the rate of 6% per annum from July 9, 2012 until the date of the award.
12-00812 Richard W. Schipper Sr., Trustee of The Richard W. Schipper, Sr. Trust DTD 8/27/97; Lois A. Schipper, Trustee of The Lois A. Schipper DTD 8/27/97; and Richard W. Schipper and Lois Schipper, Individually Ameriprise Financial Services, Inc., Fouad Hussein Zeaiter Respondent Ameriprise Financial Services, Inc. is liable for and shall pay to Claimants the sum of $10,000.00 in compensatory damages;  Respondent Fouad Hussein Zeaiter is liable and shall pay to Claimants the sum of $10,000.00 in compensatory damages.
12-00790 Corporacion Industrial Gargonz S.A. DE C.V.; Mariano Garcia Gonzalez, Amira Padilla Kuri Atlas One Financial Group, LLC Respondent is found liable on counts of unsuitablility and churning and shall pay to Claimant Kuri compensatory damages in the amount of $73,763.76.  Respondent is not found liable as to the claims of Claimants Corporacion and Gonzalez.
12-03292 Carmella M. DiMercurio Stifel, Nicolaus & Company, Inc. Respondent Stifel, Nicolaus & Company, Inc. is liable for and shall pay to Claimant, Carmella M. DiMercurio, the sum of $45,143.60 in compensatory damages.
11-04271 Felix Bernard-Diaz, Julian Rodriguez, and Luz Rodriguez BBVA Securities of Puerto Rico, Inc.;  Rafael Colon Ascar With respect to Claimants’ claims, Respondents BBVA and Ascar are jointly and severally liable and shall pay to Claimants Felix Bernard-Diaz, Julian Rodriguez and Luz Rodriguez compensatory damages and costs in the following amounts: a.  For Bernard-Diaz: $635,500.00 in compensatory damages and $15,000.00 in costs; and b. For Julian Rodriguez and Luz Rodriguez $547,000.00 in compensatory damages and $15,000.00 in costs.
11-02277 Manuel Estrada Jean-Louis Bertholet Respondent Bertholet is liable for and shall pay to Claimant compensatory damages in the amount of $81,667.00.  Respondent Bertholet is liable and shall pay to Claimant interest in the amount of $10,208.35.  Respondent Bertholet is liable for and shall pay to Claimant attorneys’ fees in the amount of $25,202.10.
12-03280 Michael and Germayne Tizzano Money Concepts Capital Corp. and Craig Alan Sutherland Respondents Money Concepts Capital Corp. and Craig Alan Sutherland are jointly and severally liable for and shall pay to Claimants, Michael and Germayne Tizzano, the sum of $10,322.00 in compensatory damages.
12-00271 Kevin F. O’Neill Birkelbach Investment Securities, Inc. Respondent, Birkelbach Investment Securities, Inc. is liable for and shall pay to Claimant, Kevin F. O’Neill, the sum of $143,951.00 in compensatory damages; Respondent Birkelbach Investment Services, Inc. is liable for and shall pay to Claimant, Kevin F. O’Neill, the sum of $500,000.00 in punitive damages; Respondent Birkelbach Investment Securities, Inc. is liable for and shall pay to Claimant Kevin F. O’Neill, the sum of $43,079.50 in attorneys’ fees.
11-00603 Chase Bailey Karl Edward Hahn Respondent Hahn is liable for and shall pay to Claimant compensatory damages in the amount of $4,134,962.18.  Respondent Hahn is liable for and shall pay to Claimant punitive damages in the amount of $6,419,962.18
11-04384 Richard Gallagher  Jerry Clark Respondent Clark is liable on the claims of fraudulent inducement, breach of fiduciary duty, negligence, and breach of contract and shall pay to Claimant compensatory damages in the amount of $80,000.00, plus interest at the Florida statutory rate, accruing from November 18, 2011 through March 14, 2013.  The Arbitrator finds clear evidence that Respondent Clark committed forgery, churned Claimant’s account and failed to keep Claimant informed, and that his behavior falls within the purview of Sections 768.72(2)(a) and (b) of the Florida Statutes.  Accordingly, Respondent Clark is liable for and shall pay to Claimant punitive damages in the amount of $500,000.00.
09-00951 Associated Humane Societies, Inc. Merrill Lynch Pierce Fenner & Smith Inc.; Merrill Lynch Trust Co. Merrill Lynch and Merrill Trust are jointly and severally liable for and shall pay to Claimant compensatory damages in the amount of $168,103.00.  Merrill Lynch and Merrill Trust are jointly and severally liable for and shall pay to Claimant punitive damages in the amount of $126,077.00.
11-01146 Angela Fini-Rose Cullum & Burks Securities, Inc.; Royal Securities Company; A. Green Financial  Group, Inc. and Allen Michael Green, Individually Respondents Cullum & Burks Securities, Inc., A. Green Financial Group, Inc. and Allen Michael Green are jointly and severally liable for and shall pay to Claimant the sum of $375,000.00 in compensatory damages; Respondents Cullum & Burks Securities, Inc. and Royal Securities Company are liable and shall pay to Claimant the sum of $25,000.00 in compensatory damages.
09-07047 Louis and Donna Pitch Oppenheimer & Co., Inc. Respondent Oppenheimer is liable for and shall pay to Claimants compensatory damages in the amount of $2,350,000.00 plus interest at the rate of 1% per annum from September 30, 2008 until the award is paid in full.  Respondent Oppenheimer is liable for and shall pay to Claimants punitive damages in the amount of $100,000.00.
09-04968 Jaclyn M. Cedeno, f/k/a Jaclyn M. Peters Ehrenkrantz King Bussbaum Inc., a/k/a EKN Financial Services, Inc., Obsidian Financial Group, LLC, and Michael Anello Respondents, Ehrenkrantz King Nussbaum, Inc. and Michael Anello, are jointly and severally liable for and shall pay to Claimant the sum of $208,171.55 in compensatory damages; Respondents Obsidian Financial Group, LLC and Michael Anello, are jointly and severally liable for and shall pay to Claimant the sum of $83,688.76 in compensatory damages; Respondents Ehrenkrantz King Nussbaum Inc. and Michael Anello, are jointly and severally liable for and shall pay to Claimant the sum of $10,000.00 in punitive damages.  Respondents Ehrenkrantz King Nussbaum Inc. and Michael Anello, are jointly and severally liable for and shall pay to Claimant the sum of $53,250.00 in attorneys fees.  Respondents Obsidian Financial Group, LLC and Michael Anello are jointly and severally liable for and shall pay to Claimant the sum of $53,250.00 in attorneys’ fees.

Financial advisors have a fiduciary duty to put their client’s needs ahead of their own.  If a stockbroker trades for the explicit purpose of generating commissions, that broker or his/her firm may be held liable for the losses incurred as a result of that trading.

Free Consultation

If you believe that you are the victim of your advisor churning or excessively trading your account, please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Franklin, Tennessee.  For more information on The White Law Group visit https://www.whitesecuritieslaw.com.

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