Massachusetts alleges Janney Failed to Supervise Broker
According toa complaint filed on May 7, 2019, Massachusetts Secretary of the Commonwealth William Galvin charged broker-dealer Janney Montgomery Scott with allegedly churning high-fee mutual funds.
The complaint alleges that between June 2012 and November 2018, former Janney representative, Stephen Querzoli, was allegedly selling Class A shares to purchase other Class A shares within short time periods, purportedly generating approximately $192,055.21 in commissions and fees.
Galvin is reportedly seeking an order for Janney to pay restitution and to sanction the firm with a fine. If found liable, Janney may also be required to hire an independent consultant to review its policies and procedures related to short-term trading of Class A shares.
According to the complaint, Class A shares are typically held for three to five years because they come with high front-end loads and lower annual expenses. If a customer is going to hold a mutual fund for a short time, a C share is better because it has a lower front-end charge and higher annual expenses.
According to his FINRA BrokerCheck report, Querzoli was registered with Janney Montgomery Scott from June 2012 through December 2018. He is not currently registered as a broker.
Janney was reportedly investigating Querzoli’s alleged trading practices in August 2015 due to his high volume of trading activity, according to the complaint.
The complaint further alleges that he ignored a suggestion from his branch manager to consider purchasing more C shares for his customers, and the investigation reportedly closed in June 2016 with no further action.
Securities Fraud Investigation
The White Law Group is investigating potential lawsuits regarding the liability that Janney Montgomery Scott may have for failure to properly supervise Querzoli.
When brokers violate securities laws,such as churning or excessively trading an account, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Franklin, Tennessee.
We represent investors in FINRA arbitration claims in all 50 states, including Massachusetts. Our attorneys have recovered millions of dollars from many brokerage firms in the past, including Janney Montgomery Scott.
If you are concerned about investments with Stephen Querzoli and Janney Montgomery Scott, please call the securities fraud attorneys at The White Law Group at 888-637-5510 for a free consultation.
For more information on The White Law Group, and its representation of investors, please visit www.WhiteSecuritiesLaw.com.