Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Palmery Desir (Desir), previously associated with Richfield Orion International, INC., has been subject to at least 3 disclosable events. These events include one customer complaint, 2 regulatory events. Several of those complaints against Desir concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.
FINRA BrokerCheck shows a final customer complaint on May 27, 2022.
Without admitting or denying the findings, Desir consented to the sanctions and to the entry of findings that he excessively and unsuitably traded one customer’s account. The findings stated that the customer’s account had an average equity of approximately $700,000, and Desir recommended that the customer place trades in his account with a total principal value of $3,860,000. The customer relied on Desir’s advice and accepted his recommendations. Collectively, Desir’s recommended trades caused the customer to pay over $134,900 in commissions and other trading costs, which resulted in an annualized cost-to-equity ratio of 20 percent – meaning that the customer’s account would have had to grow by more than 20 percent annually just to break even.
FINRA BrokerCheck shows a final customer complaint on May 27, 2022.
Desire did not recommend suitable securities, based on FINRA inquisitors determination.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $5,000.00 on December 16, 2021.
Vague claims of transactions conducted at instructions of client and commissions charged.
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. 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. Churning is recognized as a form of securities 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.
Desir has been in the securities industry for more than 14 years. Desir has been registered as a Broker with Richfield Orion International, 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.