“Churning” of a brokerage account occurs when a stock broker buys and sells stocks to generate commissions for himself without regard to the interests of the customer. It is the equivalent of theft.
In January 2018 a FINRA panel has awarded an investor the entire amount of the investor’s claim, $1.67 million in compensatory and punitive damages against her broker.
The specific legal claims were churning, unauthorized trading, unsuitable trading, breach of fiduciary duty and failure to supervise.
The broker-dealer was Madison Avenue Securities. The broker was David Lloyd Barber.
The Panel awarded the investor attorneys’ fees of almost $868,000 and costs of more than $44,000.
In 2013, Finra previously suspended Mr. Barber for four months and fined him $25,000 for improperly receiving five loans totaling $867,000 from several of his clients when he was affiliated with another brokerage, Raymond James. Barber had concealed the loans from Raymond James. Raymond James terminated Barber in 2011.
Mr. Barber previously was affiliated with First Midwest Securities then moved to Madison Avenue Securities in 2015. Barber was also affiliated Birr Wilson, Sutro, Crowell Weedon and Dain Rauscher.
It was unclear from the decision was the annual turnover was in the account or the exact amount of commissions drawn by the broker. Determination of “churning” depends on trading ratios, commission ratios and other facts related to the account. Typically, a commission ratio of over 6% of the value of the account means that the account was churned. Experts testify as to a variety of factors related to churning, such as whether the account was discretionary (ie., whether the broker had control), the number of times the account was “turned over” and the ratio of commissions charged by the brokerage as a percentage of the size of the account.http://www.BrokerFraud.Net
Anthony M. Abraham, Esq., PC is experienced in churning and unauthorized trading claims. If you suspect that your account has been churned, please call us Toll Free at 1-877-430-4877 for a Free Consultation or email us at Anthony@Abrahamattorneys.com.http://www.brokerfraud.net