According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Edward Jeffery (Jeffery) has been the subject of one customer complaint and one regulatory action. The Customers complaint against Jeffery alleges securities law violations that focus primarily on churning and excessive trading. In addition to the churning claims, the customer have complained of unauthorized trading among other claims. In the regulatory action, FINRA alleged that from July 2004 through November 2007, Jeffery effected 682 discretionary transactions in a customer’s accounts without written discretionary authority and without having the customer’s accounts accepted as discretionary accounts in violation of NASD rules. As a result Jeffery was suspended for thirty days and a fine of $10,000.
Jeffery entered the securities industry in 1992 with Paulson Investment Company, Inc until April 2012. Thereafter, from Apirl 2012 until July 2015, Jeffery was a registered representative of JHS Capital Advisors, LLC. Finally, since July 2015, Jeffery has been associated with Aegis Capital Corp. where he remains registered out of the Portland, Oregon office location.
Churning is investment trading activity in the client’s account that serves no reasonable purpose for the investor and is transacted solely to profit the broker. The elements to establish a churning claim, which is considered a species of securities fraud, 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.