FINRA Alleges Marc Reda Excessively Traded 19 Customer Accounts in Unsuitable Strategy
According to public documents posted on June 15, the Financial Industry Regulatory Authority (FINRA) is investigating financial advisor Marc A. Reda CRD No. 2757330) of New York, NY for several alleged rules violations.
According to the regulator, from January 2017 to December 2019, while associated with Spartan Capital Securities, LLC, Reda allegedly recommended to all of his customers an unsuitable investment strategy that consisted of actively trading in anticipation of corporate announcements. FINRA says that Reda purportedly failed to consider that the substantial commissions and costs associated with his investment strategy made it unlikely his customers could profit from it.
Reda’s alleged investment strategy and its high total costs reportedly harmed his customers, according to the complaint.
Across the 66 customer accounts in which Reda purportedly executed ten or more trades in connection with his unsuitable investment strategy during the Relevant Period, Reda allegedly charged $952,764 in commissions and fees while the customers reportedly lost $934,482. Fifty-four of those 66 accounts, or 82 percent, experienced cost-to-equity ratios of 20 percent or more during the Relevant Period.
FINRA further alleges that Reda churned and excessively traded 21 customer accounts he controlled, causing the customers to pay $264,734 in commissions and fees.
Reda’s alleged investment strategy and the trades he purportedly recommended to implement the strategy were also unsuitable for three of his customers based on their specific investment objectives, risk tolerances, and financial needs, according to FINRA.
In addition to the allegations of unsuitable trading, churning, FINRA alleges that Reda made unauthorized trades, charged excessive commissions, failed to disclose customer complaints, and failed to timely amend his Form U4 to disclose an unsatisfied tax lien and an unsatisfied tax warrant, totaling $225,929.49.
According to his broker report, Reda has been affiliated with Spartan Capital Securities in New York, NY for the past five years. He reportedly has 19 disclosures on his broker record including 12 customer complaints, 2 regulatory events, 1 bankruptcy, 2 employment separations, 1 criminal charge, and 1 judgment tax lien.
Filing a Complaint against your Brokerage Firm
Brokerage firms are required to adequately supervise their advisors. They must ensure they are complying with FINRA rules.
When brokers abuse client accounts and conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses. 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 brokerage firms can be held responsible for any losses in a FINRA arbitration claim if it is determined that they failed to properly supervise their agent.
If you are concerned about investments with Marc Reda and Spartan Capital Securities, the securities attorneys at The White Law Group may be able to help you. For a free consultation with an attorney, please call (888) 637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois. For more information, please visit our website, www.whitesecuritieslaw.com.