In his continued sweep to target broker-dealers who have hired brokers with disciplinary histories, Massachusetts Secretary of the Commonwealth William Galvin has filed complaints against two New York-based brokerage firms. The cases were brought against Spartan Capital Securities, broker Dean Kajouras, Revere Securities, and broker Jonathan Eric Altman.
Galvin claims that the agents named in both cases already had “numerous” reports of misconduct on their records and then went on to engage in more wrongful conduct involving older investors. The state regulator contends that the firms knew—or if they didn’t, then they should have—that Kajouras and Altman posed a risk to clients because of their histories. Galvin said that Spartan Capital and Revere Securities had a duty to put the two men on “special heightened supervision.”
Responding to the complaint, Spartan Capital said that it had retained 60 reps with previous disciplinary records between 1/2014 and 6/2016 but only felt the need to put six of them on heightened supervision.
Galvin wants to bar the firm and Kajouras from the securities industry in Massachusetts. He is seeking a censure, a fine, and compensation. He is accusing Kajouras (and Altman) of allegedly unethical and deceptive behavior. He was previously accused of overconcentration in an investor’s accounts in an oil and gas company that later failed.
In this latest case, Kajouras is accused of abusive sales practices in the account of one Massachusetts retiree. Galvin claims that Spartan Capital should have done a more proper job of supervising the broker rather than allowing his activities to go “unchecked.” The account ultimately lost money because of purportedly unsuitable recommendations and high commissions and fees.
This particular investor had primarily invested in conservative products , yet when he opened his account with Spartan Capital the broker marked his risk tolerance level as “very aggressive” with an investment objective that included “speculation.” The firm and Kajouras also purportedly solicited him to invest more funds with them, which he did. Kajouras then allegedly churned both accounts. The client sustained substantial investment losses.
In the complaint against Revere Securities, Galvin noted that Altman had a record of customer complaints alleging excessive trading and other unsuitable and unauthorized transactions. In one alleged instance, Altman is accused of excessively trading in a client’s IRA, which has lost about $290K in value. The woman, age 62, was newly widowed, had been a homemaker for two decades, and lacked any investment experience.
Altman purportedly listed her account as having the investment objectives of speculation, income, and growth even though she’d never designated “speculation” as one of her objectives. Galvin says he violated the firm’s procedures and policies when he communicated with the client about her investments using his personal e-mail account. The broker and Revere shared the $141K in commissions plus concessions related to the woman’s account.
Galvin also wants to bar Altman from the securities industry in the state. He is seeking investor restitution as well as a fine from Revere.
Unfortunately, there are brokers who have already been caught committing acts of securities fraud yet continue to find employment with different brokerage firms. These financial representatives are known as rogue brokers. When this happens, there is a risk that these rogue brokers will continue with their misconduct and abusive practices, causing more investors unnecessary losses. Our broker fraud law firm is here to help investors try to recoup their money.
We work with older investors in bringing elder financial fraud cases, as well as other retail investors and high net worth individual investors. Contact Shepherd Smith Edwards and Kantas, LTD LLP today and ask to speak with one of our experienced stockbroker fraud attorneys.