Tag Archives: excessive trading

Dennis H. Cambal-Former JHS Capital Broker-Discloses Regulatory Action & Customer Disputes

August 2016- Yarmouth, MA

The FINRA records of Dennis H. Cambal ,  a  stock broker who is currently  employed by NBC Securities  disclose a prior regulatory event and 9 prior customer disputes.

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.

Massachusetts Regulators Place Cambal on Heightened Supervision.

In 9/2015, upon reviewing Cambal’s  request for registration (Case# R-2015-114), Massachusetts securities regulators noted that Cambal has been the subject of at least 9 customer complaints alleging inter alia:

  • making excessive trades
  • failing to follow customer instructions
  • making unsuitable investment recommendations
  • effecting unauthorized trades while registered with several broker-dealers since 1983

Massachusetts regulators determined that it is in the public interest to allow Cambal’s applications for registration as a broker-dealer agent of NBC Securities, Inc. in Massachusetts upon certain conditions, which shall be effective for five years. Those conditions include:

  • Cambal shall be supervised, on a heightened basis by NBC
  • NBC shall not permit Cambal to have any principal, supervisory, or managerial duties while associated with NBC
  • NBC shall not permit Cambal to possess or exercise discretion in the handling of Massachusetts customer accounts
  • NBC shall ensure that Cambal’s Massachusetts customer are satisfied with Cambal’s services

Cambal has been employed by  NBC Securities  since 8/2015. Prior to that he was employed by JHS Capital Advisors from 10/2011-8/2015 and prior to that with RBC Capital Markets 8/2005-10/2011.

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

Sean P. McCabe Investigation-Former National Securities Corp Broker Discloses 2 Pending Customer Disputes

May 2016- Garden City, New York

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.

According to FINRA records,  Sean P. McCabe , currently a broker with Worden Capital Management discloses 2  pending customer disputes and 2 finalized customer disputes.

Currently pending cases:

  • FINRA Case 16-595- A customer of National Securities Corp alleges damages of $550,000 for negligent misrepresentation and breach of fiduciary.
  • FINRA Case 16-594- A customer of National Securities Corp alleges damages of $150,000 for breach of fiduciary duty and negligent misrepresentation.

In FINRA Case 15-1338 a customer of National Securities Corp alleged damages of $250,144 for excessive trading, unauthorized trading, misrepresentation, negligence and breach of fiduciary duty. That case was settled for $65,000 8/2016.

McCabe has been registered with Worden Capital Management since 6/2015. Prior to that he was registered with Four Points Capital Partners, National Securities Corporation and Woodstock Financial Group.

If you have questions about an account handled by Sean P. McCabe  contact us to discuss your options and to learn how you may be able to recover damages through FINRA arbitration.

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

Craig Scott Capital & Execs Accused of Churning Customer Accounts

UPDATE-August 2016-Brent Porges not currently registered. See this for details.

January 28, 2016

Craig Scott Capital (CSC) , its co-founder and President Craig Scott Taddonio and Brent Morgan Porges, a co-founder and chief operating officer were named in FINRA  disciplinary proceeding No. 20150448235-01.

FINRA makes the following allegations in their complaint:

“For nearly three years, from the day the firm opened its doors in January 2012 through at least December 2014 , CSC and its owners — Taddonio and Porges — fostered a culture of aggressive, excessive trading of customer accounts. By encouraging the firm’ s registered representatives to use upcoming earnings announcements as a catalyst for recommending hundreds, and in some cases thousands, of short-term trades in customer accounts, CSC, its owners, and brokers earned more than $5 million dollars in commissions while customers suffered more than $9 million dollars in losses in accounts where the annualized turnover rates were as high as over 200 and the annualized cost-to equity ratios were as high as over 800%.”

One of the victims is an 89 year old retiree whose goal was to make a little money to supplement his retirement income. According to FINRA, his account was heavily churned (over traded to generate commissions). Heavy use of margin borrowing, an entirely unsuitable strategy for this elderly retiree,  was implemented by the broker to increase the amount of investment dollars used to churn the account.

FINRA seeks restitution and a disgorgement of ill gotten gains and other relief.

FINRA cancelled Craig Scott Capital‘s registration on 1/28/2016 for failure to pay outstanding fees.

Craig S. Taddonio is not currently registered. In a May 2015 FINRA arbitration, a customer who alleged that Taddonio failed to supervise the brokers assigned to the customer’s account, was awarded over $328,000 against Taddonio.

Brent Porges is not currently registered. According to FINRA records, Porges has settled two customer complaints and there is currently one arbitration pending in which the customer seeks $900,000 in damages.

Churning/ Excessive Trading

Excessive trading occurs whcn a registered representative  exercises control over a customer’s account and the level of activity in that account is inconsistent with the customer’s investment objectives, financial situation, and needs. Excessive trading violates FINRA’s suitability standards under NASD Conduct Rule 2310 and FINRA Rule 2 11 1.  Excessive trades recommended with requisite scienter such as a reckless disregard for a customer’s interests – is considered churning.

Excessive trading generally is measured by the turnover rate, which is the number of times the value of the account is turned over within a given period of time, and the cost-to-equity ratio, which represents the percentage of return on the customer’s average net equity needed to pay commissions and other account expenses over a given period of time.

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

Zachary Bader-Former Craig Scott Capital Broker Barred From Industry for Churning Customer Account

November 13, 2015-Melville NY

Rex Securities Law is investigating options for recovery for investors who suffered damages in brokerage accounts handled by Zachary T. Bader.

Zachary Bader , entered into a Letter of Acceptance Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that from February 2012-July 2013 he engaged in excessive trading in three customer accounts with a reckless disregard for the interests of those customers.

In addition, FINRA alleges that Bader made unsuitable recommendations of a complex Exchange Traded Note (ETN) to 21 customers without reasonable basis to believe that the ETN was suitable for at least some of the investors.

Excessive trading occurs whcn a registered representative  exercises control over a customer’s account and the level of activity in that account is inconsistent with the customer’s investment objectives, financial situation, and needs. Excessive trading violates FINRA’s suitability standards under NASD Conduct Rule 2310 and FINRA Rule 2 11 1.  Excessive trades recommended with requisite scienter such as a reckless disregard for a customer’s interests – is considered churning.

Excessive trading generally is measured by the turnover rate, which is the number of times the value of the account is turned over within a given period of time, and the cost-to-equity ratio, which represents the percentage of return on the customer’s average net equity needed to pay commissions and other account expenses over a given period of time.

According to the FINRA AWC, one of the clients, a farming company, lost over $400,000 and was charged nearly $200,000 in commissions, making the cost-equity ratio about 275% and resulted in a turnover ratio of about 74.

AWC No.  20130363873-01

Bader was barred from the securities industry.

According to FINRA records, Bader  was registered with National Securities Corporation  from 8/2013-8/2014. Prior to that he was registered with Craig Scott Capital from 2/2012-8/2013 and with Brookstone Securities from 3/2011-2/2012.

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

Cape Securities Fined $125K by Securities Regulators

May 5, 2015

Cape Securities  entered into a Letter of Acceptance Waiver and Consent (AWC)  with the Financial Industry Regulatory Authority (FINRA) to resolve allegations that:

  • from 2/2012-9/2012 Cape Securities failed to establish, maintain and enforce supervisory systems designed to detect and prevent fraudulent wire transfer activity by its brokers.
  • Cape Securities Anti-Money Laundering (AML) systems and procedures were inadequate to ensure appropriate reporting of potentially suspicious money movement
  • from 10/2011-2/2013 Cape Securities supervisory system was inadequate and failed to identify and prevent unsuitable excessive trading and churning in customer accounts

Cape Securities was censured and  fined $125,000 .

FINRA AWC 2013035211002

Cape Securities has been a FINRA member since 1976. It has 118 registered representatives who operate out of a main office in McDonough, Georgia, and 20 branch offices and 79 non-registered office locations.

If you have an account with Cape Securities that has suffered losses, you may be entitled to damages. Call to discuss your legal options.

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