Articles Tagged with Feltl & Company

shutterstock_190371500-300x200According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former Feltl & Company (Feltl) broker Todd Meier (Meier) has been discharged for failure to follow firm policies and procedures with regards to interactions with a client.  This discharge occurred in April 2018.  The termination occurred shortly after Meier was subject to a customer complaint alleging churning or excessive trading that occurred from 2009 through 2012 causing $363,443 in damages.  The claim was settled for $125,000.

In addition, Meier has been subject to numerous tax liens and declared bankruptcy in 2015.  Such disclosures on a broker’s record can reveal a financial incentive for the broker to recommend high commission products or services.  FINRA discloses information concerning a broker’s financial condition because a broker’s inability to handle their own personal finances has also been found to be material information 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.

shutterstock_95643673According to the BrokerCheck records kept by Financial Industry Regulatory Authority (FINRA) broker Timothy Wynne (Wynne) has been the subject of at least 5 customer complaints. The customer complaints against Wynne allege securities law violations that claim churning and excessive trading, unsuitable investments, unauthorized trading, fraud, misrepresentations, and discretionary trading among other claims. The most recent complaint was filed in October 2014, and alleged $500,000 in losses due to churning and excessive commission charges from February 2012 through October 2014. Another complaint filed in July 2014, alleged over $3.3 million in damages caused by unsuitable discretionary trading. Another complaint also filed in July 2014 alleged unsuitable investments in Monticello MN Telecommunication municipal bonds.

Wynne entered the securities industry in 1986. From January 2002, until February 2012, Wynne was associated with with Oppenheimer & Co. Inc. Presently, Wynne is associated with Feltl & Company out of the firm’s Minneapolis, Minnesota branch 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.

shutterstock_187532303The Financial Industry Regulatory Authority (FINRA) has sanctioned brokerage firm Feltl & Company (Feltl) and fined the firm $1,000,000 concerning allegations that the firm, between January 2008, and February 2012. failed to comply with the suitability, disclosure, and record-keeping requirements for broker-dealers who engage in penny stock business. FINRA alleged that Feltl did not provide some customers with Securities and Exchange Commission (SEC) risk disclosure document two days prior to effecting a penny stock transaction in the customers’ accounts. failed to sufficiently supervise penny stock transactions for compliance with applicable rules and regulations, and failed to establish, maintain, and enforce written supervisory procedures for its penny stock business.

Feltl has eight branch offices located in Minnesota and Illinois, and approximately 113 registered representatives and has been a FINRA member since 1975.

The term “penny stock” generally refers to securities that trades below $5 per share, issued by a small company. Penny stocks often trade infrequently making it difficult to sell and price. Due to the size of the issuer, the market cap, the liquidity issues, and other reasons penny stocks are generally considered speculative investments. Consequently, the SEC requires broker-dealers effecting penny stock transactions to make a documented determination that the transactions are suitable for customers and obtain the customers’ written agreement to those transactions.