On June 26, 2013, the Financial Industry Regulatory Authority (FINRA) fined StateTrust Investments, Inc. $1.045 million and sanctioned Jose Luis Turnes, the firm’s head trader, for charging excessive markups and markdowns on 563 corporate bond transactions. The FINRA news announcement, which may be accessed here, alleged that 85 of the trades operated as a fraud or deceit on the customers.
In 227 of the instances cited by FINRA, the markups or markdowns exceeded 5 percent. In some instances the excessive markups and markdowns ranged from 8 percent to 23 percent.
FINRA has indicated that it intends to aggressively pursue firms and individuals who charge customers excessive markups and markdowns.
According to the release, in a related April 2012 action, Jeffrey Cimbal, Chief Compliance officer for StateTrust was fined $20,000 and suspended for five months for failing to supervise Turnes.
In addition, FINRA order StateTrust to pay restitution of $353,000 to certain aggrieved customers.
If you have questions about losses or other transactions in your stock brokerage account, contact us to discuss your legal rights.
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