Churning Charges – Caldwell International Corp.
According to FA-Mag.com, The Financial Industry Regulatory Authority (FINRA) has charged Caldwell International Corp. with churning customer accounts to generate $1 million in excess commissions.
Allegedly, beginning in 2011, the Texas based firm acquired several offices of supervisory jurisdiction, located in New York and New Jersey. FA-Mag reports that FINRA has accused the firm’s founder, Greg Caldwell and two supervisors, of looking the other was as four offices churned customer accounts.
“Despite a number of warnings, including 15 customers who lost $1.1 million and paid more than $1 million in commissions and fees, Caldwell and the firm’s supervisors took no action, the complaint says.”
Furthermore, FINRA says the firm failed to report more than 35 customer complaints.
In addition to charging the three supervisors, Finra is investigating five registered reps, including Richard Adams, who were formerly associated with the firm.
Brokers have a fiduciary duty to make investment recommendations that are in the client’s best interest and consistent with the client’s net worth, investment experience and objectives, but also risk tolerance, age, and liquidity needs among other factors. Furthermore, brokers are prohibited from engaging in underhanded businesses practice, like churning, that violate securities laws and regulations.
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. 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 worked with broker at Caldwell International Corp and suffered significant financial losses, the attorneys of The White Law Group may be able to help recover your losses. 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 with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group, visit www.WhiteSecurtiesLaw.com.
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