Broker Investigation: Complaints Against Caeron McClintock

shutterstock_93851422The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Caeron McClintock (McClintock).  According to BrokerCheck records McClintock has been the subject of at least two customer complaints and two judgements or liens.  The customer complaints against McClintock allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, and churning (excessive trading) among other claims.

The most recent complaint was filed in August 2016 and alleged unauthorized trading causing $17,000 in damages.  The complaint is currently pending.  In December 2015 another investor filed a similar complaint and alleged negligence, misrepresentation, and churning causing $50,000 in damages.  The complaint 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.

The number of customer complaints against McClintock is high relative to his peers.  According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records.  Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints.  In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters.  However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck.  More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.

McClintock entered the securities industry in 1999.  From November 2008 until June 2011, McClintock was associated with J.P. Turner & Company, L.L.C.  From June 2011 until June 2012, McClintock was registered with Brookstone Securities, Inc.  Thereafter, from June 2012 until April 2013, McClintock was associated with Legend Securities, Inc.  Thereafter form April 2013 until April 2015, McClintock was associated with E.J. Sterling, LLC.  Form April 2015 until September 2015 McClintock was registered with Rothschild Lieberman LLC.  Then from September 2015 until March 2016 McClintock was again with Legend Securities.  Finally, from March 2016 until October 2016 McClintock was associated with Spartan Capital Securities, LLC out of the firm’s New York, New York office location.

The investment fraud attorneys at Gana Weinstein 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.

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