The firm, as well as its president and CCO, are charged with alleged churning, excessive trading and unsuitable recommendations
Equinox Securities, as well as President Steven Michael Oliveira and CCO Chris Blaine Palkowitsch, were all charged by the FINRA Department of Enforcement in a specific complaint about allegations of excessive churning of customer accounts and excessive trades, in addition to making unsuitable recommendations for customers.
Churning occurs when a broker repeatedly buys or sells securities in a customer’s account in order to generate commissions from those sales without any benefit to the customer. Purchases that don’t appear directly necessary to the customer’s investment goals may be classified as churning and can lead to a FINRA investigation.
According to the complaint, Oliveira and Equinox were both responsible for failing to provide adequate supervision of Palkowitsch, who did not disclose tax liens on his U-4. The department of enforcement found that from November of 2008 to July of 2012, Chris Palkowitsch was accused of churning six customers’ accounts and recommending excessive trades.
According to the complaint, he would regularly charge his customers $75 for each commissioned transaction he handled and would regularly execute transactions in principal amounts of between $100 and $300, mostly targeting his customers’ IRAs.
During the course of his tenure between 2008 and 2012, it is estimated that he managed several hundred to several thousand of these transactions, which garnered excessive commission payments even though it left his clients with cost equity ratios higher than 100% and aggregate losses totaling more than $800,000. It was also stipulated that Palkowitsch was guilty of transferring his clients’ remaining funds into risky positions.
Other reports indicate that Palkowitsch has at least two other customer disputes that happened prior to joining the Equinox firm. One of those was settled with a customer for more than $200,000 after a claim of trading losses and another customer dispute was settled for $21,466 following claims of churning and unauthorized transactions.
Unfortunately, this story is common in the securities industry. Even when a FINRA investigation or suspension ultimately stops the behavior, investors have still experienced significant financial losses. The better news is that investors do have rights and can pursue their losses through securities arbitration. So if you have been the victim of an unethical financial advisor, contact Silver Law Group for a complimentary case review with one of our experienced securities arbitration attorneys.