Articles Tagged with Investment Adviser Representative

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered investment losses at the hands of financial and investment advisers who churned and burned their accounts. One of the most prevalent abuses in the securities industry is excessive trading, or “churning” client accounts. This practice, which is forbidden by industry regulators like FINRA and the SEC, is done to generate commissions, almost always at the expense of the client. As the stock market swings wildly during the Covid-19 pandemic, brokers take advantage by trading their clients’ accounts to generate commissions.

Brokers can open the door to churning by asking customers if they want an “active” trading strategy, which gives brokers discretionary ability to trade at will. Unless clients give specific directions on how and when to trade, brokers may take the opportunity to trade excessively and charge needlessly high commissions.

Churning has been the subject of numerous regulatory actions over several decades. Broker Frank Venturelli, a representative for First Standard in Red Bank, New Jersey, was cited by FINRA for excessive trading between 2016 and 2018. According to FINRA settlement, clients lost more than $373,000 during that period. Venturelli was suspended from the industry for 11 months and ordered to pay partial restitution of $30,000 to his clients.

Stoltmann Law Offices is investigating Michael J. Howard, who entered into a Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA). Howard was registered with Wayne Hummer Investments LLC from September 2009 until he was fired in January 2014. According to his Form U-5 filed by Wayne Hummer Investments: “Mr. Howard was found to have an outside business activity without disclosing, seeking or obtaining firm approval in violation of FINRA Rule 3270 and firm policy.” Howard was found to have provided financial advisory services to a personal friend who was not a customer of Wayne Hummer, and, for this, Mr. Howard received $20,000 in commissions. He also participated in a private securities transaction without seeking or obtaining firm approval, and in which he was loaned $157,191 to buy a real property tax lien certificate, the Cortland Certificate, that he later sold for a profit. This is against securities rules and regulations and is commonly referred to as “selling away.” This is when a broker solicits investments that are not held or offered by his investment firm.

Howard was registered with Proffitt & Goodson Inc. in Knoxville, Tennessee from January 2004 until April 2013. He is not currently registered with any investment firm and not registered as an Investment Adviser Representative, according to his Investment Adviser Public Disclosure record according to the Securities and Exchange Commission (SEC) website. If you invested money with Michael J. Howard, please call our securities law firm based in Chicago at 312-332-4200 to speak with an attorney. You may be able to bring a claim against Howard’s former firm, Wayne Hummer Investments, for failing to properly supervise him. The call is free with no obligation.

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