On September 29, 2014, Jesse White, the Secretary of State for Illinois recently announced it set a hearing for November 6, 2014 to determine whether James B. Markoski should be banned from offering or selling securities in the State of Illinois.
According to the action, Mr. Markoski “has a storied history of securities fraud, having victimized at least eight customers during his employment at Merrill Lynch which resulted in millions in losses to his victims and for which Merrill Lynch paid restitution.” According to FINRA’s BrokerCheck, Mr. Markoski was registered with Merrill Lynch from 1971 – 1991 and at least 6 customer complaints were lodged against Mr. Markoski during that time.
After Mr. Markoski was terminated from Merrill Lynch, he moved to David A. Noyes & Company, where at least one additional complaint was filed against him, according to Illinois, . Mr. Markoski worked at David A. Noyes until June 2010 when he moved to Birkelback Investment Securities, Inc. Mr. Markoski currently works at Forest Securities Inc. In total, nine customer complaints have already been brought against Mr. Markoski and his employers and more are expected after Illinois’ regulatory action.
According to the action, Mr. Markoski has “an extensive history of churning customer accounts.” “Churning” is defined as excessive trading by a broker in a customer’s account for the purpose of generating commissions. Churning is illegal and unethical and violates FINRA and SEC Rules.
According to Illinois, if the nine complaints were not enough, Markoski targeted three elderly widows to victimize for his own financial gain. The first of the three customers was a 76 year old, conservative widow with low risk tolerance. Originally the customer was in primarily fixed income securities with her broker. After Markoski solicited her business, he sold most of her fixed income and churned the customer’s account according to the Illinois complaint. Within 6 years the customer lost over $340,000 in an account that originally held $668,548.80 in equity.
The second of three customers was 85 years old and living in Illinois. That customer also was a widow with modest risk tolerance. Despite her profile, Illinois states that Markoski churned her account by buying and selling same or similar securities repeatedly over a three year period.
Finally, Markoski’s third customer was a conservative investor seeking to maintain her life savings to prepare for her retirement. Illinois states that Markoski used high-pressure sales tactics to garner commissions in the customer’s accounts.
In sum, Illinois states that Markoski violated the Illinois securities law of 1953. The complaint asks for a fine to be issued in the amount of $10,000 per violation and that the liquidation of the bonds in the first customer’s account constitutes at least 350 violations. In addition, the Secratary of State is seeking a suspension and revocation of Markoski’s securities license.
Gana LLP is carefully monitoring the Illinois action and is seeking clients who invested with James Markoski at Forest Securities, Inc., David A. Noyes & Company, or Birkelbach Investment Securities. If you lost money investing with Markoski, give us a call for a free consultation. You can reach one of our attorneys by phone at (800) 810.6242 or by email at email@example.com.