According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Jean-Matthieu Josse (Josse) has been subject to at least two customer complaints during his career. Josse is currently employed by A.G.P. / Alliance Global Partners (Alliance Global). The customer complaints against Josse concern allegations of high frequency trading activity also referred to as churning and unsuitable investments.
In October 2018 a customer filed a complaint alleging that Josse violated the securities laws by engaging in churning and unauthorized trading. The claim alleged $45,000 in damages. The claim settled for $14,990.
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.