Did You Suffer Investor Losses While Working With Ex-Network 1 Financial Securities Broker Charles Malico?
Customers Accuse New York Financial Advisor of Broker Misconduct
In the Financial Industry Regulatory Authority’s (FINRA’s) first disciplinary action related to Regulation Best Interest, the SRO has imposed a $5K fine and six-month suspension against former Network 1 Financial Securities financial advisor Charles Vincent Malico in Huntington Station, New York. This is not the first time that Malico has been accused of broker negligence, churning, or misconduct.
Charles Malico’s CRD notes that he has 11 disclosures on record, including a number of customer disputes. The allegations against him include churning, unsuitability, breach of fiduciary duty, and unauthorized trading.
If you are someone who suffered significant investor losses while working with previously registered New York broker Charles Malico, our knowledgeable broker fraud attorneys at Shepherd Smith Edwards and Kantas (investorlawyers.com) are here to help you explore your legal options.
What Is Churning and How Does It Lead to Investor Losses?
According to FINRA’s findings, between July 2020 and November 2021, Malico allegedly did not fulfill his duty of care to one customer when he recommended trades that, given the latter’s investment profile, were clearly unsuitable and excessive and therefore not in their best interests. Through more than 350 trades made in this claimant’s account—which had an average balance of around $30K during the period at issue— Malico earned over $54K in commissions.
Such excessive trading, also known as churning, meant that the investor’s account would have had to grow by over 158% yearly just to break even. This customer has also filed a FINRA lawsuit.
Churning is when a broker engages in excessive trading in a customer’s account for the purpose of earning commissions rather than because this is a good investment strategy for this particular client. It is against the law and a breach of a financial advisor’s fiduciary duty.
Churning may lead to investor losses. For example, brokers usually earn commissions or a flat percentage fee when making trades and the customer ends up having to pay every time. Even if these trades make money they can lead to a higher tax liability for the investor.
How Do You Know If You Have Grounds for a FINRA Arbitration Claim Against Your Broker for Excessive Trading?
Proving you have been the victim of churning can be tough, which is why you need to work with seasoned stockbroker fraud lawyers that know how to prove you have been the victim of excessive trading.
Our investor losses attorneys at Shepherd Smith Edwards and Kantas have helped many investors who have been the victim of churning recover damages from their brokerage firm in FINRA arbitration. Call (800) 259-9010 today.