Jovannie Aquino, a former Windsor Street Capital broker, is now barred by the US Securities and Exchange Commission. Aquino was charged by the regulator last year with allegedly churning in clients’ accounts. The Commission is accusing Aquino of engaging in acts of fraud and omissions that caused customers to lose about $881K, even as he made $935K in commissions.
The SEC, in its complaint, accused the ex-Windsor Street Capital broker of excessive trading in retail customers’ accounts. The regulator said that Aquino allegedly convinced at least seven customers to maintain trading accounts at Windsor and told them he would engage in a trading strategy that would cause them to make money. He suggested frequent, short-term trades and charging fees and commission for each transaction.
The Commission said that because of how often the trading took place, along with the fees and commissions that the clients were charged, from the start they stood to lose money rather than make a profit. This means that Aquino didn’t have reasonable grounds for thinking that his trading strategy would be suitable for the customers despite the fact that suitability for recommending an investment is a requirement. Not only that, but also, for six of the investors who were harmed, the trading levels employed were entirely unsuitable for them in light of their investment goals, financial needs, the level of risk that they could handle, and other specifics.
The regulator estimated that to cover the transaction expenses alone, the customers would have had to make yearly returns of about 21-406% on their investments. The Commission concluded that the degree of excess trading that occurred would not have been suitable for any client.
Aquino allegedly failed to get customers’ permission before making the trades and did not let them know key material facts about the trading strategy he planned on using, which he was required to inform them about.
In summary, Aquino allegedly engaged in:
- Inadequate and unsuitable recommendations
- An unsuitable investment strategy
- Misrepresentations and omissions
- Making statements that materially false and misleading
During his just 11 years as a broker, Aquino worked at 13 firms, three of which have been expelled by the Financial Industry Regulatory Authority (FINRA). His record shows at least four customer disputes, most of them alleging unauthorized trading.
Aside from Windsor Street Capital, Aquino has been a registered representative at Spartan Capital Securities, John Carris Investments, John Thomas Financial, Rockwell Global Capital, National Securities Corporation, JP Turner & Company, Bank of America Investment Services, Avalon Partners, Inc., and four other firms. John Carris Investments Financial, John Thomas Financial, and Windsor Street Capital are the three expelled broker-dealers. Formerly called Meyers Associates, LP, Windsor Street Capital was barred following allegations that some of its brokers had engaged in fraudulent trading in customer accounts, omissions and misrepresentations, a markup scam, and for keeping poor records.
Unfortunately, there are rogue brokers in the industry and it is the often broker-dealers with negligent trading practices that will hire them. As a prospective investor, it is important that you do your due diligence before agreeing to sign with a broker-dealer and or registered representative, including checking their records, backgrounds, and any past disclosures. However, broker fraud and brokerage firm negligence can still happen.
Please contact our broker misconduct lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) so that we can help you determine whether you have grounds for filing an investor claim. Over the years, we have helped thousands of investors in recouping their investment fraud losses.