Category Archives: Discretionary Trading

Feltl & Co. Broker Timothy O’Brien Sanctioned by Securities Regulator

December 31,2014

Timothy David O’Brien   entered into a Letter of Acceptance, Waiver and Consent  (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that he traded the accounts of several his customers at Feltl & Company  without their  prior written authority (exercised discretion)

Industry rules provide that “no member or registered representative shall exercise discretionary power in a customer’s account unless such customer has given prior written authorization to a stated individual or individuals and the account has been accepted by the member…”

From July 2012 to February 2013, O’Brien used discretion to execute over 170 transactions in the customers’ accounts.

Case # 2013036967201

O’Brien was suspended for ten days and agreed to pay a fine of $5,000.

According to FINRA records O’Brien has been  registered with Feltl & Company since  5/4/2012. Prior to that he was registered with Robert W. Baird & Co.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

PHX Financial Accused of Churning in Montana Securities Regulator Action

On October 28, 2014 the Montana Commissioner of Securities filed a Notice of Proposed Agency Action and Opportunity against PHX Financial, Inc. , aka Blackwall Capital, a Montana licensed broker-dealer and the following former and present employees of PHX Financial:

  • William Horbatuk, Jr. -former sales person for PHX.
  • Halil Kozi– Registered Options and Security Futures Principal for PHX
  • Robert Delaplain– Chief Compliance Officer of PHX
  • Kevin Chen– PHX’s CEO
  • Kenneth Williams- served as Horbatuk’s direct supervisor

The Montana regulatory pleading’s allegations include the following:

  • On May 7, 2013 , the Montana Securities Commissioner notified Chen and informed him that a heightened supervision plan would be needed because Horbatuk had eight reportable items on his FINRA record (CRD)
  • In June 2014 a Montana resident and Horbatuk client submitted a complaint to the Montana Commissioner alleging that Horbatuk had traded his account excessively, charged him excessive commissions, failed to provide account statements and traded on margin without authority.
  • An analysis of the account revealed that over an 18 month period Horbatuk initiated 125 transactions in 51 securities in the client’s account, of which 105 were solicited.
  • Several stocks were bought and sold several times over short periods. Ampio Pharmaceutical was purchased and sold 23 times in 8 months and Questcor Pharmaceuticals was purchased and sold 19 times over 9 weeks.
  • The client’s account lost $147,079 of the $147,443 he initially invested.
  • Commissions paid to PHX and Horbatuk totaled over $75,000
  • The turnover rate was over 33 using the Looper formula.

The Montana Securities Commissioner action seeks various relief, including,  fines, restitution and revocation of PHX’s registration in Montana.

Churning and the “Looper” Turnover Rate

The Looper turnover rate calculates the total dollar amount of purchases during a time period divided by the average account equity and then annualized. As a rule of thumb twice a year turnover is “suggestive” of excessive trading. Four times a year is “indicative” and six times a year turnover is “conclusive” of excessive trading.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

James Purtle, Feltl and Company Broker, Sanctioned by FINRA

October 10, 2014-Ramsey, Minnesota

James Harrison Purtle entered into a Letter of Acceptance, Waiver and Consent  (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that from February 2010 through December 2012 he exercised discretion in one customer’s account without obtaining prior written authorization from the customer . Case # 2013036525701.

Purtle was fined $7,500 and suspended for 10 days.

According to FINRA records, Purtle has been registered with Feltl and Company since 4/2005. FINRA records also report that in June 2013 a customer complaint that an account had been churned and charged excessive commissions was settled for over $53,000.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

First Independent Financial Group Broker James Ham Sanctioned by FINRA

October 1, 2014-Dallas, Texas

James M. Ham entered into a Letter of Acceptance, Waiver and Consent  (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that between October 23, 2013 and March 25, 2013, Ham executed 280 discretionary trades by making reallocations in the sub accounts of variable annuities in the accounts of 7 customers without obtaining the written authorization from the customers or his firm, First Independent Financial Services.   Case # 2013039556701.

Ham was fined $5,000 and suspended from association in all capacities with any FINRA member firm for 60 days.

FINRA records indicate Ham was registered with First Independent Financial Services from 3/2006–10/2014. Prior to that he was registered with Butler Freeman Tally Financial Group (BFT Financial Group), Bedford, Texas.  

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870