Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Matthew Fleissner (Fleissner) currently associated with National Securities Corporation (National Securities) alleging unauthorized trading and excessive fees and commissions among other claims. According to brokercheck records Fleissner has been subject to two customer complaints and one criminal matter.
The type of claims being made against Fleissner are often associated with claims of excessive trading or churning. When brokers engage in excessive trading the broker will typically 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. Many brokers who engage in churning will not take the time to explain to the investor the exact reasons for the transactions and will provide vague and general responses to requests for information such as this is the strategy we are pursuing.
Churning investment trading activity in a client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions. Churning is considered a type 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.