Christopher Veale, a broker who worked at Stratton Oakmont Inc., was accused by Massachusetts securities regulators of excessive trading in the account of an 81-year-old person from 2010 to 2012.
The regulators said today in a statement that they’re seeking to bar Veale from the securities business in Massachusetts, along with his former colleague, Ali Habib Mayar, and their firm Brookville Capital Partners LLC, the brokerage where they worked at the time.
Martin Scorsese depicted Stratton Oakmont, Inc. in the film The Wolf of Wall Street. Prosecutors said that Stratton Oakmont generated millions of dollars in illicit profits by aggressively selling penny stocks and manipulating their prices from its offices in Lake Success, New York, before being shut down by regulators in 1996.
“It is unbelievable to me that these people are still in the industry.” said Adam Gana, managing partner of Gana LLP, “I can’t believe the SEC has not barred every broker that worked at Stratton Oakmont already.”
“Rogue brokers have long been a plague on the investing public,” Secretary of the Commonwealth William Galvin said in a statement. “My office, along with other state and federal regulators, is determined to move aggressively against them as well as the firms that hire them.”
According to regulatory records, Veale was employed at Stratton Oakmont from 1995 to 1996. Veale has worked at 17 different firms since then, according to the Massachusetts regulators, including John Thomas Financial Inc., another boiler room that shut down last year amid fraud allegations. According to Bloomberg News, John Thomas Financial pumped brokers up with the “Rocky” theme and made trainees stand to deliver memorized scripts for as little as $300 a week.
According to the regulators and Bloomberg News, “an 81-year-old masonry business owner from Rhode Island opened an account with Brookville in 2010 after getting a cold call from a salesman. Over the next two years, the investor put $873,622 into the account and incurred $319,818 in commissions and hidden markups.”
Gana LLP, a law firm located in central Manhattan, represents investors in churning claims. If you have been a victim of churning, contact us.