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Written by 5:55 pm Broker Investigations, FINRA SEC Sanctions

Barred LPL Broker Andrew Komarow Charged with Fraud 

Barred LPL Broker Andrew Komarow Charged with Fraud featured by top securities fraud attorneys, the White Law Group

SEC Charges Andrew Komarow with “Free-Riding” Fraud Scheme   

According to a press release, the Securities and Exchange Commission on February 21, 2024, indefinitely barred Andrew Komarow from engaging in financial activities, less than a year after he was barred by FINRA.

According to the agency, the Securities and Exchange Commission charged former LPL Financial broker Andrew Komarow (CRD # 5838564) with a “free-riding” trading scheme. Komarow, based in Avon, CT, was accused of making material misrepresentations to trade $6.9 million that he did not have.

“Free Riding” Scheme 

In securities trading, a “free riding” scheme refers to an illegal practice where an investor purchases securities without paying for them. Instead, the investor sells the securities before paying for them with the proceeds from the sale.

This is considered fraudulent because it violates regulations that require investors to have sufficient funds or securities in their account to cover purchases before executing trades. Free riding schemes artificially inflate trading volumes and can lead to market manipulation, potentially harming other investors and undermining market integrity.

Unfunded Transfers 

From October 2022 to January 2023, Komarow allegedly made unfunded transfers from various bank accounts to brokerage accounts at four firms and then traded the unsettled cash to turn a profit, according to the SEC’s complaint.

He allegedly withdrew at least $615,000 while leaving the brokerages responsible for losses of more than $3 million from trades in high-risk options, according to the complaint. In one case, he purportedly attempted to transfer $2.4 million in funds from a bank account that had a balance of $100, according to the agency.

Partial Settlement with the SEC 

Komarow reportedly reached a partial settlement with the SEC and agreed that he would not open any brokerage account without first providing the firm with a copy of the SEC’s court complaint and judgment. He is barred from placing any trades using unsettled cash.

The Financial Industry Regulatory Authority (FINRA) reportedly barred Komarow from the brokerage industry in June after its investigation into allegations that he “processed ACH instructions for his own account knowing there were insufficient funds, then improperly used credit to place trades, resulting in negative balance.”

FINRA BrokerCheck – Andrew Komarow

According to Komarow’s FINRA BrokerCheck report, he was affiliated with the following firms during his twelve-year career:

12/13/2022 – 01/04/2023, ROYAL ALLIANCE ASSOCIATES, INC. (CRD#:23131), West Hartford, CT,   B, 04/26/2016 – 12/22/2022, LPL FINANCIAL LLC (CRD#:6413), WEST HARTFORD, CT  B, 10/29/2010 – 05/23/2016, PRUCO SECURITIES, LLC. (CRD#:5685), West Hartford, CT

Filing a Complaint against your Brokerage Firm  

FINRA has regulations in place to ensure advisors act in the best interest of their clients (known as the fiduciary duty), but it’s wise for investors to stay informed and ask for clarification about any recommendations made by their advisor.

When brokers abuse client accounts and conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

Free Consultation

If you have suffered investment losses with Andrew Komarow, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.  

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.

With over 30 years of securities law experience, The White Law Group has the expertise to help investors to recover their securities fraud losses.  For more information, please visit our website, www.whitesecuritieslaw.com.

Tags: , , , , Last modified: February 22, 2024