Broker Investigation: Customer Complaints Against Frank Marinelli

shutterstock_128856874The securities lawyers of Gana LLP are investigating customer complaints against Frank Marinelli (Marinelli). According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) Marinelli has been the subject of at least 3 customer complaints, 1 employment termination, 2 judgment or liens, and 1 criminal matter. The customer complaints against Marinelli allege a number of securities law violations including that the broker made unsuitable investments, churning (excessive trading), misrepresentations, negligence, fraud, and unauthorized trading other claims.

The most recent customer complaint was filed in March 2014 and alleges unsuitable investments and churning causing $120,000 in damages. Another complaint filed in March 2012 alleges high pressure sales tactics unauthorized trading and mismanagement of the client’s account leading to $200,000 in damages.

Marinelli also has two liens listed, both filed in 2010 related to taxes. One lien is for $123,240 and the other is for $41,306. A broker with large liens are an important consideration for investors to weigh when dealing with a financial advisor. An advisor may be conflicted to offer high commission investments to customers in order to satisfy liens and debts that may not be in the client’s best interests.

Marinelli entered the securities industry in 1999. From September 2001 through December 2011, Marinelli was associated with J.P. Turner & Company, L.L.C. Since December 2011 Marinelli has been registered with Southeast Investments, N.C., Inc. out of the firm’s Brooklyn, New York office location.

Some of the complaints against Marinelli involve allegations of churning. When brokers engage in churning the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time. Often times the account will completely “turnover” every month with different securities. This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades.

The elements to establish a churning claim, which is considered a species of securities fraud, are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

The investment fraud attorneys at Gana LLP represent investors who have suffered securities losses due to the mishandling of their accounts. The majority of these claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.