Albert Foronda Has Excessive Trading Complaint

shutterstock_177577832-300x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Albert Foronda (Foronda), currently associated with Spartan Capital Securities, LLC (Spartan Capital), has been subject to at least three customer complaints and one regulatory investigation during his career.  The majority of the customer complaints against Foronda concern allegations of high frequency trading activity also referred to as churning or excessive trading.

In November 2019 FINRA initiated an investigation into Foronda stating that FINRA made a preliminary determination to recommend that disciplinary action be brought against Foronda alleging violations for unauthorized transactions for exercising discretion without written authorization.

In May 2019 a customer complained that Foronda violated the securities laws by alleging that Foronda engaged in unsuitability, excessive trading, and negligence in handling of their account. The claim alleges $650,000 in damages and is currently pending.

In April 2018 a customer complained that Foronda violated the securities laws by alleging that Foronda engaged in breach of fiduciary duty, breach of contract, and negligence in handling of their account. The claim alleges $90,000 in damages and is currently pending.

When brokers engage in excessive trading, sometimes referred to as 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.  Churning is considered a species of securities fraud.  The elements of the claim 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.

According to newsources, a study revealed that 7.3% of financial advisors had a customer complaint on their record when records from 2005 to 2015 were examined.  Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and criminal cases.  In addition, research has show a disturbing pattern with troublesome brokers where brokers with high numbers of customer complaints are not kicked out of the industry but instead these brokers are sifted to lower quality brokerage firms with loose hiring practices and higher rates of customer complaints.  These lower quality firms may average brokers with five times as many complaints as the industry average.

Foronda entered the securities industry in 2010.  From November 2016 until August 2017 Foronda was registered with Worden Capital Management LLC.  Since August 2017 Foronda has been registered with Spartan Capital out of the firm’s New York, New York office location.

At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to excessive trading and churning violations.  Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation.  Claims may be brought in securities arbitration before FINRA.  Our consultations are free of charge and the firm is only compensated if you recover.