Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Vincent Mangone (Mangone), previously associated with Worden Capital Management LLC, has been subject to at least 2 disclosable events. These events include 2 customer complaints. Several of those complaints against Mangone 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 $330,113.00 on July 08, 2021.
Churning and quantitative unsuitability; unauthorized trading; standards of commercial honor and principles of trade; and, breach of fiduciary contract. Alleged activity dates are December 2016 through late 2020, although only activity from October 2017 forward was margin sellouts.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $284,108.07 on April 28, 2021.
Between August 2015 and January 2020, client alleges fraudulent misrepresentation and omission of material fact; unsuitable recommendations and trading strategy; failure to act with high standards of commercial honor; and, lack of reasonable supervision.
When brokers engage in churning, or excessive trading, they often rapidly buy and sell securities, sometimes even the same stock repeatedly, within a short span of time. Often times the account will completely “turnover” every month with different securities. The only purpose of this investment trading activity in any client’s account is to generate commissions that benefit the broker, not the investor. Churning is considered a species of securities fraud. Excessive trading of securities, broker manipulation of the account, and the intent to deceive the investor for illicit commissions form the basis of the claim. 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.
Mangone has been in the securities industry for more than 30 years. Mangone has been registered as a Broker with Worden Capital Management LLC 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.