On Sep. 10, SEC charged brokers for recommending excess trades.
- Charges for Florida resident Emil Botvinnik, and NY resident Jovannie Aquino.
- Were representative with Meyers Associates, LP, (later Windsor Street Capital).
- For recommending excessive level of trading that are costly to retail customers.
- Follows similar SEC charges of excessive trading, in Jan., Sep., and Dec. 2017.
- Follows Jan. 2017 investor alert on excessive trading and churning by brokers.
Alleged Violations
- Recommended frequent, short-term trades with $4.6mn in broker commissions.
- However, the trades were almost guaranteed to lose money for their customers.
- Customers – some near retirement age – lost $3.6 million as a result of trades.
- Brokers need to ensure trading level they recommend is suitable for customers.
- SEC said investors should be on the lookout for frequent trades within accounts.
- Conducted unauthorized trades and concealed material information from clients
on transaction cost for recommendations, likely to outstrip any gains in account.
Sanctions
- SEC sought disgorgement of ill-gotten gains and interest, and pay civil penalty.
