Stockbroker Excessive Trading Attorney - Law Offices of Robert Wayne Pearce

Mar 16, 2020

Financial West Stockbroker Daniel G. Maughan Barred for Churning and Unsuitable Recommendations

Daniel Gordon Maughan submitted an Offer of Settlement to the Financial Industry Regulatory Authority (FINRA) in which he allegedly churned, excessively traded and made unsuitable recommendations in a customer’s account in violation of Section 10(b) of the exchange Act of 1934, Rule 10b-5, and FINRA Rules 2020 and 2010. From May 18, 2010 until August 17, 2017, Daniel Maughan was registered with Financial West as a General Securities Representative. According to FINRA, Mr. Maughan exercised de facto control over a customer’s trust account, executing approximately 1,648 trades, totaling $70 million. FINRA stated that Daniel Maughan’s churning and excessive trading generated commissions of $841,000 while causing the account to incur losses of $812,000. FINRA’s findings also stated the trading was inconsistent with the customer’s objectives and financial needs, and Mr. Maughan did not have a reasonable basis to believe the transactions were suitable. In addition, FINRA stated that by churning and seeking to maximize his own financial benefit Daniel Maughan acted either with intent to defraud the account or with reckless disregard for the customer’s interests. Daniel Maughan has been barred from association with any FINRA member in all capacities.

May 29, 2018

FINRA Bars Vanderbilt Securities Broker for Excessive Trading

Mark Kaplan, a former registered representative with Vanderbilt Securities, submitted a Letter of Acceptance, Waiver, and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was permanently barred from association with any FINRA member firm in all capacities. Mark Kaplan, of Merrick, New York, was found by FINRA to have engaged in excessive trading in his customer’s accounts. His customer, a 93-year-old man with dementia, allegedly suffered trading losses of approximately $723,000. According to FINRA, Mr. Kaplan used his de facto control over his customer’s accounts to excessively trade in a manner that was inconsistent with his customer’s objectives, financial goals, and risk tolerances. FINRA found that Mr. Kaplan effected more than 3,500 transactions is his customer’s accounts. This excessive and unsuitable trading resulted in nearly $723,000 in trading losses for his customer, and generated approximately $735,000 in commissions and markups for Mr. Kaplan and Morgan Stanley. Without admitting or denying FINRA’s findings, Mark Kaplan consented to the sanctions.

Jul 26, 2017

Former Gold Coast Securities Broker Named in FINRA Complaint Alleging Churning

Joseph Farah, a former registered representative with Gold Coast Securities, was named a Respondent in a Financial Industry Regulatory Authority (FINRA) complaint for allegedly engaging in a fraudulent churning scheme, causing his customer to suffer substantial losses. Joseph C. Farah, of Hacienda Heights, California, is alleged by FINRA to have acted with intent to defraud and reckless disregard for his customer’s interests by churning his customer’s account. According to FINRA, Mr. Farah allegedly executed more than 600 trades in his customer’s account, causing the account to diminish in value by over 25%. The FINRA complaint alleges that Mr. Farah failed to inform his member firm that he had discretionary authority over the customer’s account, which Mr. Farah suggested she open at TD Ameritrade. FINRA’s complaint notes that the customer’s annual income was listed as just $25,000 – $49,999, which was correct, but her investment experience was incorrectly described as 1-2 years of experience. FINRA found that she actually had no investing experience.