Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Alexander Kline (Kline), currently associated with Cambridge Investment Research, Inc., has been subject to at least 3 disclosable events. These events include 3 customer complaints. Several of those complaints against Kline concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.
FINRA BrokerCheck shows a pending customer complaint on August 14, 2024.
Statement of Claim alleges an investment recommendation was made for the purpose of generating high commissions and fees and that Claimants were deprived of the ability to generate reasonable returns that would have been received in a diversified portfolio.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $110,000.00 on January 19, 2024.
Statement of Claim alleges the RR recommended a non-conventional investment without presenting the required risk disclosures resulting in significant financial losses.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $500,000.00 on October 31, 2023.
The Statement of Claim alleges the financial professional recommended unsuitable investments. Claimant suggests the investments were misrepresented to him.
Should brokers engage in excessive trading, known as churning, they typically buy and sell securities, sometimes even the same stock, repeatedly over a short span of time. The account could frequently “turnover” entirely within a short timer with new securities. The only purpose of this kind of investment in the client’s account is to generate commissions, which benefit the broker, but not the investor. Securities regulators consider churning to be a distinct form of investment fraud. Excessive trading of securities, broker manipulation of the account, and the intent to deceive the investor for illicit commissions form the basis of the claim. 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.
According to newsources, a study revealed that 7.3% of financial advisors had a customer complaint on their record when records from 2005 to 2015 were examined. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and criminal cases. In addition, research has shown a disturbing pattern with troublesome brokers where brokers with high numbers of customer complaints are not kicked out of the industry but instead these brokers are sifted to lower quality brokerage firms with loose hiring practices and higher rates of customer complaints. These lower quality firms may average brokers with five times as many complaints as the industry average.
Kline entered the securities industry in 1984. Kline has been registered as a Broker with Cambridge Investment Research, Inc. since 2011.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.