Category Archives: Montana Securities Department

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

D.A. Davidson Broker Susan Skaar Sanctioned by Securities Regulators

December 2, 2014- Bozeman, Montana

To resolve allegations that from 2003-2014, she affixed initials of 4 customers to four documents and signed the signatures of two other customers to two documents, Susan Skaar consented to a 20 day suspension and a fine of $5,000.

By initialing and signing customer initials and names, Skaar violated NASD Conduct Rule 2110 and FINRA Rule 2010.

According to FINRA records, Skaar has been registered with D.A. Davidson & Co. since 1993.

Rex Securities Law , located in Boca Raton, FL, provides representation to  investors  in Montana and 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.

Rex Securities Law

561 391 1900

Montana Securities Regulators Offer “How to Smell A Rat” Fraud Awareness Handouts

Monica J. Lindeen, Montana Commissioner of Securities and Insurance offers investor education resources on their website, these How to Smell a Rat Fraud Awareness handouts:

  • Investor Bill of Rights
  • 7 Steps to Smart Investing
  • Investigate before you invest
  • Protecting Others from Securities Fraud
  • 10 Questions for unsolicited calls about investments

Rex Securities Law provides nationwide representation to investors 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.

Rex Securities Law

561 391 1900