Articles Tagged with over concentration

Bull BearFINRA’s ongoing campaign to rein in alleged sales abuses involving short-term trading of unit investment trusts in customer accounts has led a 23-year veteran advisor to accept a $10,000 fine and three-month suspension.

Miller Stern Lawyers – 410-Law-Firm is currently investigating clients of Stifel Nicolaus and all firms and broker dealers who may be victims of, and suffered damages and losses, due to abuses such as short-term trading of unit investment trusts, breach of fiduciary duty, overcharging , and unauthorized trading.

Bull Bear Miller Stern Lawyers – 410-Law-Firm is currently investigating clients of Merrill Lynch and Charles Kenahan and Dermond Cavanaugh who are may be victims of, and suffered damages and losses, due to abuses such as churning, beach of fiduciary duty, overcharging , and unauthorized trading.

According to CNBC and other new outlets, the State of New Hampshire “is ordering Merrill Lynch to pay $26.25 million in fines and restitution to the state and to an investor, the former Governor of New Hampshire, who claimed he suffered losses at the hands of a former Boston-based broker, to settle allegations including unauthorized and excessive trading”, or what is commonly known as Churning.

This is the largest monetary sanction in New Hampshire history and proportedly the second largest FINRA settlement in at least a decade.

Miller Stern Lawyers – 410-Law-Firm is currently investigating clients of Wells Fargo Advisors who are victims of, and suffered damages and losses, due to the failure to supervise.  It has been reported that Wells Fargo Advisors has agreed to pay more than $550,000 in fines and restitution for failing to follow up on warnings it received about two now-barred California brokers who piled their customers into speculative energy stocks, according to FINRA.  Miller Stern Lawyers recently won a $1.5 Million award against Stifel for similar actions of piling their customers into biotechnology and health care stocks.

According to FINRA, the firm failed to investigate trading across customer accounts managed by the brokers. Red flags were raised about overconcentration in the accounts of four customers in a single, low-priced energy stock (ranging from 35.2% to 87.0%), according to a consent letter signed on Thursday by Wells Fargo Advisors CEO Jim Hays.

Bull BearAccording to Advisor Hub customer complaints and litigation against brokerages will be heating up with the market turmoil.  Most of the industry will likely conclude that coronavirus pandemic fears and oil wars between Russia and Saudi Arabia are the cause of the market drop and are totally out of anyone one person or companies control, however there can be broker misconduct involved in the level of losses because of things such as over-concentration and other individual account irregularities.

“The extent of losses may not be apparent to investors for three to six months, they said, and plaintiffs’ lawyers will then have to analyze portfolios and underlying claims of unsuitability to triage the ones most appropriate for litigation.”

The S&P 500, Dow Jones Industrial Average and Nasdaq Composite are in bear market territory down 20% from their February highs.

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