The securities fraud lawyers of Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Bernardo Misseri (Misseri). According to BrokerCheck records Misseri has been the subject of at least seven customer complaints, five judgements or liens, and two regulatory actions. The customer complaints against Misseri allege a number of securities law violations including that the broker made unsuitable investments, unauthorized trading, fraud, misrepresentations, and churning (excessive trading) among other claims. In addition, there are two regulatory claims against Misseri. One by the state of Illinois filed in June 2010 that suspended the broker for two years. Another action was filed by the NASD in 2005 alleging that Misseri effected private securities transactions away from his firm by soliciting certain limited partnerships.
Misseri has disclosed several large tax liens including a $6,746 in March 2015, a tax lien of $7,662 in February 2015, a $37,847 tax lien in November 2014, a $11,884 tax lien in June 2014, and a $217,156 tax lien in August 2013. Substantial judgements and liens on a broker’s record can reveal a financial incentive for the broker to recommend high commission products or services. A broker’s inability to handle their personal finances has also been found to be relevant in helping investors determine if they should allow the broker to handle their finances.
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.