SW Financial Sued for Excessive, Unsuitable and Unauthorized Trading
According to a FINRA award on August 30, a three-person panel ordered former FINRA- registered broker dealer SW Financial to pay $3.2 million to a Greenville, SC investor for excessive, unsuitable and unauthorized trading.
The claimant alleged that his SW Financial advisor, Peter Girgis, engaged in churning in high-risk stocks. Further, Girgis purportedly failed to do reasonable due diligence on the unsuitable investments and did not disclose the risks of the stocks or the strategy, according to the FINRA statement of claim filed on May 31, 2022.
The recovery includes $1.4 million in compensatory damages, $500,000 in punitive damages, $975,171 in returned commissions and fees, $297,208 in attorneys’ fees, $7602 in costs and $400 in arbitration fees, according to the award.
Between December 2019 and April 2022, the claimant reportedly incurred trading losses of $1.06 million and commissions and other fees of $975,171, and paid margin interest of $213,659.
According to reports, Girgis was based in New York City and first contacted the client through a cold call. While the reward may sound like a win, the challenge now will likely be to collect the money.
Churning/Excessive Trading – SW Financial
Churning occurs when a broker makes an excessive number of trades within a client’s account, primarily for the purpose of generating commissions or fees for themselves. These trades are typically unnecessary and serve no legitimate investment purpose. Instead, they are intended to generate income for the broker, often at the expense of the client. Churning can be costly due to transaction costs and possible capital losses due to the frequent trading.
Excessive trading and churning violates securities laws and regulations because it breaches the fiduciary duty that brokers and advisors owe to their clients. They are expected to act in the best interests of the client and not engage in trading solely to benefit themselves.
Potential Recovery through FINRA Arbitration
Filing a FINRA (Financial Industry Regulatory Authority) claim can be a valuable step for investors who believe they have been victims of churning or excessive trading by their broker or financial advisor.
FINRA is the primary regulatory authority overseeing the securities industry in the United States. When you file a FINRA claim, you are initiating a legal process that can hold the broker responsible for their actions. FINRA has the authority to investigate and take disciplinary actions against registered individuals and firms found to have engaged in churning or excessive trading.
If your claim is successful and it is determined that you suffered financial losses due to churning or excessive trading, you may be eligible for compensation. FINRA arbitration panels have the authority to award monetary damages to investors who have been harmed by unethical or illegal practices.
FINRA Lawyers & Securities Attorneys
If you have suffered losses with your broker due to churning or excessive trading, please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.
The White Law Group, LLC is a well-established law firm specializing in national securities fraud, securities arbitration, investor protection, and securities regulation/compliance. With offices in Seattle and Chicago, our primary focus is assisting investors from all 50 states in their claims against financial professionals or brokerage firms. Since our inception in 2010, we have successfully handled over 700 FINRA arbitration cases.
Our dedicated attorneys are committed to representing investors in a wide range of securities-related claims. These include cases involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, unauthorized trading, and more.
With a collective experience of over 30 years in securities law, The White Law Group possesses the necessary expertise to assist defrauded investors in their pursuit of recovering their investment losses. To learn more about our services, please visit our website at whitesecuritieslaw.com.