April 2017- Mineola, NY
The FINRA records of David Menashe, a stock broker who is currently employed by Newbridge Securities Corp. disclose a final regulatory event.
The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.
Office of the Commissioner of Securities and Insurance, Montana State Auditor Case No. SEC-2016-124
On June 8, 2016, the Montana Commissioner of Securities and Insurance (CSI) filed a complaint (CSI Case Number SEC-2016-124) naming David Menashe, who at the time was a salesperson with Joseph Stone Capital and other parties who were also employed by Joseph Stone Capital.
The Montana CSI complaint alleges that in January 2016, the Montana Commissioner of Securities received a cold call from a broker who worked for Joseph Stone who was then transferred to an analyst working for the securities commissioner. The Joseph Stone broker then pitched an investment about Paypal to the Montana CSI employee who then informed the broker that he had called the Montana State securities regulators. At that point, the Joseph Stone broker denied he was trying to solicit an investment and hung up.
That same day Montana CSI requested complete records regarding all of Joseph Stone’s Montana clients. Analysis of the records revealed churning in the accounts of Montana residents, overcharging of commissions and other statutory violations.
According to the Montana CSI complaint with regard to one of the accounts handled by Menashe , the customer invested about $86,000 with Joseph Stone and the total of all trades in the account resulted in $2.6 million in purchases and $2.6 million in sales. This resulted in a Looper turnover rate of 11.48 and 11.46 respectively. The average hold period for a securities position in the account was 33.76 days. Joseph Stone Capital and Menashe received commissions totaling over $82,000.
In April 2017, Menashe was ordered to contribute $15,000 toward restitution to the victims. Link to Consent Agreement and Final Order.
Churning & The Looper Formula
The Looper turnover rate calculates the dollar amount of purchases during a time period divided by the average account equity annualized. The 2-4-6 ‘rule of thumb’ turnover rate is often used to generally analyze trading:
- Twice a year is ‘suggestive’ of excessive trading
- Four times a year is ‘indicative’ of excessive trading
- Six times a year turnover is ‘conclusive’ of excessive trading
David Menashe has been registered with Newbridge Securities since 1/2017. He was registered with Joseph Stone Capital 2/2013-1/2017. Prior to that he was employed by First Midwest Securities.
If you have questions about an account handled by David Menashe call to speak with an experienced securities attorney.
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.
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