According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Serge Parakhnevich (Parakhnevich), currently associated with PHX Financial, INC., has been subject to at least 3 disclosable events. These events include 2 customer complaints, one regulatory event. Several of those complaints against Parakhnevich concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $50,000.00 on July 23, 2021.
In early summer of 2015, claimant alleges excessive trading, unauthorized trading, and breach of fiduciary duties took place in his account by his registered representatives at the time.
FINRA BrokerCheck shows a final customer complaint on August 06, 2020.
Without admitting or denying the findings, Parakhnevich consented to the sanctions and to the entry of findings that he executed trades in a customer account without the customer’s prior written authorization or his member firm’s approval of the account as discretionary. The findings stated that the customer was generally aware of the fact that Parakhnevich was exercising discretion in his account. In addition, Parakhnevich completed and submitted firm compliance questionnaires wherein he falsely answered questions related to whether he handled customer accounts on a discretionary basis.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $249,281.00 on April 22, 2020.
UNSPECIFIED. CLAIMANT ALLEGES UNSUITABILITY, BREACH OF CONTRACT, BREACH OF FIDUCIARY DUTY.
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. Every month or a few months, the account could be completely replaced with new securities. The sole beneficiary of this kind of investment trading activity is the broker, who profits from the commissions generated by these trades, which serve no meaningful purpose for the investor. In the realm of securities law, churning is classified as a type of fraud. The claim is based on excessive securities trading, the broker’s control over the account, and a fraudulent scheme to extract unlawful commissions from the investor. 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 shown 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.
Parakhnevich entered the securities industry in 2008. Parakhnevich has been registered as a Broker with PHX Financial, INC. since 2015.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.