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NEWSLETTERS & ALERTS
2 Brokers Churned Customer Accounts - SEC
Gregory Dean and Donald Fowler, two registered reps with now-defunct J.D. Nicholas (fka A&F Financial Securities), were charged by the SEC with fraudulently using an ‘in-and-out’ trading strategy that was unsuitable for customers in order to generate excessive commissions for themselves and their firm.
As per the SEC’s complaint …… Dean, 35, and Fowler, 30, worked at Syosset, NY-based J.D. Nicholas from January 2007 through November 2014. During that time, the firm was fined and sanctioned for its failure to supervise brokers for excessive trading. This fit the pattern of trading conducted by Dean and Fowler for their clients, whom they attracted primarily through nation-wide cold-calling.
Their strategy generally involved selling securities within a week or two of purchase and charging customers a commission for each transaction, which allegedly resulted in substantial losses for their 27 clients. Apparently, Dean and Fowler conducted no reasonable diligence to determine whether their investment strategy could deliver even a minimal profit for their customers.
The SEC’s complaint, filed in federal court in Manhattan, charges Dean and Fowler with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.