Our Broker Fraud Lawyers Are Investigating Churning Allegations That May Have Cost Customers Millions of Dollars

The Financial Industry Regulatory Authority (FINRA) has filed a complaint against Spartan Capital Securities over allegations of extensive account churning that resulted in nearly $18 million in customer losses and trading costs. Investors who suffered financial damage from this excessive trading can work with the firm’s experienced churning attorneys to pursue legal options and recover their losses.

If you are an investor who sustained portfolio losses while working with a Spartan Capital Securities financial advisor, contact Shepherd Smith Edwards and Kantas (investorlawyers.com) today to schedule your free case assessment. The broker-dealer is under scrutiny over churning allegations in customer accounts.

What Are The Churning Allegations Involving Spartan Capital Securities?

In December 2025, the Financial Industry Regulatory Authority (FINRA) filed a complaint accusing the New York-based brokerage firm of excessive trading in customer accounts between January 2018 and April 2022that resulted in millions of dollars of revenue for Spartan Capital Securities while costing these investors money.

• 114 customer accounts—53 of them belonging to seniors—purportedly incurred almost $10M in trading costs and nearly $8M in investment losses.
• FINRA contends that the excessive trading led to cost-to-equity ratios of up to 491%.
• 1/3^rd of revenue for the broker-dealer purportedly came from accounts with cost-to-equity ratios greater than 20%.
• FINRA alleges that Spartan Securities’ business model relied on excessive trading.
• It accused the brokerage firm of ignoring red flags indicating that this type of broker misconduct was taking place and hurting customers.

Who Are The Brokers that FINRA Names in Its Churning Complaint Against Spartan Securities?

• James Pecoraro
• Kim Marie Monchik, who oversaw the broker-dealers’ trading from January 2018 through February 1, 2019.
• John Stapleton
• Suspended financial advisor Frederick Joseph Cammarano III was a branch manager at the New York office that oversaw many of the brokers.
• Former financial advisor Michael Darvish

The self-regulatory organization (SRO) contends that 36 other Spartan Securities brokers did not take “meaningful” action to address, including stopping, the churning in customer accounts.

What Is Excessive Trading and Why Is It Harmful to Investors?

Excessive trading, for the purpose of generating more fees and commissions for a broker-dealer and its registered representative, is also known as churning.

• It can hurt investors financially because it may incur charges whenever an investment is bought or sold.
• This type of trading is also harmful because it is typically deemed unnecessary, which is why it is considered “excessive.”
• Churning benefits brokers, who profit from these fees, while taking money out of an investor’s account.
• Excessive trading becomes fraudulent when a financial advisor does it in a customer’s account primarily to generate fees.
• Churning can lead to tax consequences for an investor.
• It can also deprive them of long-term gains because they didn’t stay in a position for very long.

What Are Some Signs of Possible Churning In My Brokerage Account?

• You notice an unusual increase in trades happening in the account, including the buying or selling of the same security or type of security.
• The brokerage fees you are paying are unusually high.
• Your account balance seems to have dropped in value significantly, even though the market is stable.
• There are trades happening in your account to which you did not agree or give permission.

How Can Shepherd Smith Edwards and Kantas Help Me With My Churning Losses?

Our savvy excessive trading lawyers can help you assess whether you have grounds for suing your broker for misconduct and to recoup your losses. We offer robust securities representation and know how to maximize an investor’s chances for full recovery. We have secured awards and settlements for many investors who have been the victims of excessive trading and other broker misconduct.

Talk To One of Our  Trusted Churning Attorneys About Your Excessive Trading Losses Today

Call (800) 259-9010 or reach out to us online.