(FINRA Case #2017052709201)
Steven John Meyer (CRD #4798400, South Plainfield, New Jersey)– An AWC (Accept, Waiver, Consent) was issued in which Meyer was barred from association with any FINRA member in all capacities.
Without admitting or denying the findings, Meyer consented to the sanction and to the entry of findings that he engaged in churning and unsuitable excessive trading in customers’ accounts, two of whom were senior citizens.
The findings stated that Meyer exercised control over these accounts, and the high costs and turnover rates were inconsistent with the customers’ objectives, yet generated steady income for Meyer in the form of commissions or markups or markdowns (collectively, sales charges).
Most of the customers had limited investment experience and all of them relied on Meyer to direct investment decisions in their accounts. Meyer’s active trading in the accounts generated sales charges at the expense of his customers. Since more than half of the trades were mark ups or markdowns, the customers could not appreciate the extent of the costs. The high turnover rates and cost-to-equity ratios demonstrate the increasing difficulty for the accounts to make sufficient profits from the trading to cover the costs of Meyer’s in-and-out trading. Consequently, Meyer’s active trading in the accounts resulted in more than $115,000 in cumulative losses to his customers, while Meyer generated $160,000 in sales charges.
Meyer worked for Legend Securities, Inc. (CRD#44952) from January 2011 to October 2016. Legend Securities, Inc. was expelled from FINRA in April of 2017.
The findings also stated that Meyer engaged in pervasive unauthorized trading in one of the customers’ accounts. This particular customer experienced losses of $44,074.05 to his account, while Meyer generated sales charges of $33,897.41.
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