The Financial Industry Regulatory Authority has suspended a rep for nine months due to excessive trading in two older clients' accounts, violating Regulation Best Interest.
Between October 2019 and April 2022, Mack Leon Miller recommended that two retail customers — both 66 years old — make a series of trades that were excessive, unsuitable and not in the customers' best interests, according to FINRA's order.
As a result, Miller, a rep with New York-based Spartan Capital Securities, willfully violated the Best Interest Obligation of Reg Bl as well as FINRA Rules 2111 and 2010.
The trading resulted in high cost-to-equity ratios that exceeded the traditional guidepost of 20%, as well as significant losses, according to FINRA.
In July 2021, a 66-year-old farmer opened an account at Spartan with Miller. Between July 2021 and April 2022, Miller recommended 20 transactions in the client's account, resulting in annualized cost-to-equity ratio of 30%, the order states.
Miller's trading in the client's account generated $6,905 in commissions and resulted in $13,542 in realized losses.
In February 2018, a 66-year-old small business owner opened an account at Spartan with Miller and another registered rep.
Between October 2019 and April 2020, and between October 2020 and April 2022, Miller recommended 31 transactions in the client's account resulting in an annualized cost-to-equity ratio of 24%, the order states.
The customer "relied on Miller's advice and routinely followed his recommendations, and, as a result, Miller exercised de facto control" over the client's account, according to the order. Miller's trading in the client's account generated $25,325 in commissions and resulted in $57,480 in realized losses.
Courtesy photo: FINRA
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