Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Michael Puma (Puma), previously associated with Oppenheimer & CO. INC., has been subject to at least one disclosable event. These events include one customer complaint. Several of those complaints against Puma 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 on July 17, 2023.
Claimants assert claims for breach of fiduciary duty, fraud, negligence, breach of contract, unsuitability and churning in connection with use of margin and trading in their accounts. From 2016-2019.
Should a broker participate in excessive trading, or churning, they may repeatedly buy and sell securities, occasionally even the same stock, within a short span of time. Every month, the account often completely “turns over” with different securities. The sole purpose of this kind of investment trading activity in the client’s account is to generate commissions that benefit the broker, not the investor. Churning is considered a species of securities fraud. The claim consists of: an excessive number of securities transactions, broker control over the account, and fraudulent intent to obtain 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.
Puma has been in the securities industry for more than 28 years. Puma has been registered as a Broker with Oppenheimer & CO. INC. since 2002.
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.