FINRA Suspends Spartan Capital Broker for Excessive Trading Violations
From the desk of Jim Eccleston at Eccleston Law
The Financial Industry Regulatory Authority (FINRA) has suspended Joseph Kelly, a broker at Spartan Capital Securities, for nine months and ordered him to pay a $10,000 fine and $69,830 in restitution. As reported by ThinkAdvisor, FINRA found that Kelly engaged in excessive trading in four retail customer accounts in violation of Regulation Best Interest (“Reg. BI”).
According to FINRA’s findings, Kelly excessively traded in client accounts. Three of the affected clients routinely relied on his recommendations, granting him de facto control over their accounts. FINRA determined that Kelly’s trading resulted in turnover rates between 10 and 35 and cost-to-equity ratios ranging from 42 percent to 171 percent. ThinkAdvisor reports that FINRA found that the rates and ratios are well above traditional thresholds. His activity generated $365,344 in commissions while causing $262,683 in realized losses for the customers.
FINRA concluded that “the level of trading that Kelly recommended in the four customers’ accounts was excessive.” Kelly submitted a FINRA Acceptance, Waiver and Consent (AWC), agreeing to the sanctions without admitting or denying FINRA’s findings.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, finra, spartan capital securities
