JHS Capital Advisors, LLC

Background Information

JHS Capital Advisors (JHS) is a subsidiary of JHS Capital Holdings, Inc. It was founded in 2009 and is headquartered in Tampa, Florida. The Founder, John H. Sykes, was the former chairman and shareholder of GunnAllen Financial before GunnAllen filed for bankruptcy.

Regulatory Violations

JHS Capital Advisors has been the subject of several regulatory investigations in its short existence, some which resulted in disciplinary actions by regulators. It has also been the subject of several FINRA arbitration claims for investor losses.

Connecticut Customers Charged Hidden Fees

In 2010, the Connecticut Banking Commissioner fined JHS $10,000 for failing to itemize and disclose to its Connecticut clients the fee classified as “Postage and Handling” on trade confirmations and could be construed as an additional commission. Those fees ranged from $7.50 to $100 per transactions and were in excess of the actual amount of JHS’s ticket and clearing charge and the postage fee assessed by its clearing firm.

FINRA Fines and Sanctions – JHS

JHS Capital Advisors, LLC (CRD #112097, Tampa, Florida) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $75,000 for exercising discretion in non-discretionary accounts without written authorization from the customers. JHS was terminating its relationship with one clearing firm and needed to transfer accounts from that clearing firm to another clearing firm. In 882 instances totaling approximately $1.1 million in sales, JHS liquidated securities in non-discretionary accounts without oral or written authority to execute such sales. (FINRA Case #2011026248501)

JHS Capital Advisors, LLC (CRD #112097, Tampa, Florida) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $300.000 for charging unreasonable handling fees and improper and inaccurate disclosure of such fees, in additional to other violations. The firm routinely charged its customers a “handling fee”, in addition to a commission, on equity security trades. The handling fee charge varied in amount from trade to trade. The particular dollar amount charged was not attributable to any specific cost or expense incurred by the firm in executing the trade, or determined by any formula applicable to all customers. The “handling” fee actually served as a source of additional transaction-based revenue to the firm, similar to a commission. By designating the charge as a handling fee on customer trade confirmations, the firm was understating the amount of total commissions charged by the firm. The firm also failed to establish, maintain, and enforce a supervisory system that was reasonable designed to review the fairness of commission charges. The AWC also charged the firm with failure to report customer complaints and having an inadequate supervisory system relating to due diligence in connection with private placement offerings. (FINRA Case #2009015974701)

In, 2012, JHS was held liable in FINRA arbitration award and ordered to pay claimant a total of $1,693,204.01 in compensatory and punitive damages, interest and attorneys’ fees. The claimant asserted the broker excessively churned his account to generate commissions. The alleged excessive trading required the client to generate returns of 160% just to break even. In addition, the claim asserted common law fraud, ordinary negligence, gross negligence, breach of contract, negligent retention and/or negligent hiring, control person liability and respondeat superior.

Silver Law Group

Silver Law Group is a nationally recognized securities and investment fraud law firm with Martindale-Hubbell® Peer Review Ratings™ “AV” rated lawyers that handle all securities arbitration matters on a contingency fee basis. The Law Firm, at no cost to investors will review account activity and account statements to determine whether there was any misconduct, whether there are damages and the legal causes of action. We investigate all sales practice violations, while taking into consideration the investor’s age, investment background, and the relationship between the investor and the brokerage firm and its financial advisor. According to securities industry rules and regulations, unsuitable investment advice, securities concentration, fraudulent misrepresentations and omissions of material facts, breach of fiduciary duty, conflicts of interest, variable annuity switching are among the causes of action that may be available to investors in claims for damages against brokerage firms and their financial advisors in a securities arbitration claim filed with the Financial Industry Regulatory Authority (FINRA). We represent investors in FINRA arbitration claims on a contingency fee basis.

To learn more call us at (954) 755-4799 or Toll Free at (800) 975-4345

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