Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Larry Schwartzman (Schwartzman), currently associated with Oppenheimer & CO. INC., has been subject to at least one disclosable event. These events include one customer complaint. Several of those complaints against Schwartzman concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.
FINRA BrokerCheck shows a settled customer complaint on October 06, 2022.
Customer asserts claims for unsuitability, breach of fiduciary duty, churning and excessive trading, unauthorized trading and violation or FINRA and securities laws and regulations. 10/2018 – 10/2022.
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. Every month, part of the account are replaced by 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. In the realm of securities law, churning is classified as a type of fraud. The fundamental aspects of the claim involve excessive securities transactions, the broker’s undue influence over the account, and an intention to defraud the investor for illegal financial gain. 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.
Schwartzman entered the securities industry in 1984. Schwartzman has been registered as a Broker with Oppenheimer & CO. INC. since 2018.
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.