FINRA Suspends Ex-Spartan Capital Securities Broker Justin Deiter
Excessive Trading Can Cause Portfolio Losses
If you sustained investment losses while working with former Spartan Capital Securities financial advisor Justin Ray Deiter, contact the Shepherd Smith Edwards and Kantas Churning Lawyer Team (investorlawyers.com) today. The New York broker was suspended by the Financial Industry Regulatory Authority (FINRA) for six months in the wake of allegations that he engaged in excessive trading in two customers’ accounts. One of the clients involved was a senior investor. FINRA contends that Deiter’s trading led to high turnover rates and cost-to-equity ratios that went beyond the traditional 6% and 20% guideposts, respectively. This led to the investors sustaining substantial losses.
According to ThinkAdvisor, Deiter recommended 32 transactions in one conservative customer’s account. This led to an annualized 7 turnover rate and an annualized cost-to-equity ratio of 34%. Meanwhile, the NY financial advisor earned $19,792 in commissions while the investor sustained a five-figure loss. As for the other customer, an 89-year-old retiree, this investor suffered a five-figure loss, too, while Deiter’s allegedly excessive trading earned him more than $28K in commission. For both investors, their realized losses was more than the commissions they paid.
FINRA said that the level of trading that Deiter recommended in both customers’ accounts was unsuitable, excessive, and not in their best interests. The self-regulatory organization found that because of the purportedly excessive trading, Deiter violated Reg BI’s Best Interest Obligation, as well as FINRA Rules 2111 (Suitability) and 2010 (Standards of Commercial Honor and Principles of Trade).
Justin Deiter’s CRD shows four previous customer disputes alleging unsuitability, breach of fiduciary, and more. These investor lawsuits resulted in settlements for the claimants.
Deiter was a Spartan Capital registered representative from 2020 to 2023. He was an Allied Millennial Partners broker from 2018 to 2020. He worked with three other firms before that, including two that have since been expelled.
When Excessive Trading Leads To Investor Losses
Excessive trading in your account by a broker can lead to huge losses. Often, a financial advisor may engage in this type of practice—also known as churning—in order to earn more commissions. Excessive trading is generally unsuitable and often a violation of a customer’s best interests. Meanwhile, broker-dealers can be held liable for failing to prevent, identify, or stop churning from happening.
Possible signs indicating that you may be the victim of excessive trading:
- A lot of trading appears to be happening in your account.
- Your account seems to be dropping in value relative to the market.
- The trading strategy being employed appears to not be in line with your financial goals or risk tolerance level.
- You are paying your broker a lot in commissions compared to what you are making in your account; even more disturbing is that you may be sustaining significant losses from all these transactions.
You want to work with a seasoned excessive trading law firm that knows how to identify when churning has happened and possesses the skills, resources, and knowledge to maximize your chances for recouping damages. Our trusted churning attorneys have been representing retail investors, retirees, high-net-worth investors, accredited investors, and institutional investors for more than 30 years. More than 90% of our clients have obtained full or partial financial recovery because of the quality securities representation that we provide.
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