Churning Attorneys

When Excessive Trading Violates Regulation’s Best Interest

Broker-Dealer PHX Financial Accused of Costing Customers $1M

According to the Financial Industry and Regulatory Authority (FINRA), excessive trading is what happens when a registered financial professional recommends a large number of trades that are not in line with a customer’s investing goals. Instead, it is the financial advisor who benefits, usually in excess commissions earned. Another term for excessive trading is churning.

Recently, the Securities and Exchange Commission (SEC) ordered PHX Financial Inc. to pay almost $350K for violating Regulation Best Interest when it purportedly excessively traded in eight customer accounts. According to the regulator, PHX Financial broker Baris Cabalar recommended a short-term, high-volume investing strategy to multiple clients without having reasonable grounds for doing so.

The SEC said that because of the high volume of transactions that were recommended, and the accompanying fees and commissions, it was “virtually impossible” for positive returns to be generated for these customers.

Because of this alleged churning, the customer sustained a collective $1M in losses in their brokerage accounts. Meanwhile, PHX Financial and Cabalar earned more than $400K in commissions in fees.

PHX will have to pay nearly $143K in disgorgement, nearly $25K of prejudgment interest, and a $180K civil penalty.

Did You Sustain Investment Losses While Working With PHX Broker Baris Cabalar?

Shepherd Smith Edwards and Kantas Churning Attorneys (investorlawyers.com) represent those who have sustained losses because of excessive trading by a broker or investment adviser. If you suspect that you are the victim of churning involving Baris Cabalar or any other financial advisor, contact us today.

According to Baris Cabalar’s CRD, the Fort Lauderdale, Florida financial advisor has 10 disclosures on record, including three customer disputes that have resulted in settlements. One churning case was settled for $185K.

The SEC, filed a separate complaint against Cabalar. The Commission is accusing him of employing a short-term, high-volume trading strategy without reasonable grounds and for not disclosing that when he allegedly unsuitably recommended these excess trades, the commissions and fees that he and the broker-dealer charged would likely lead to losses for customers.

Why Hire Our Knowledgeable Churning Attorneys?

We have been fighting for investors for over 30 years. When you work with our Churning Attorneys, you are retaining our entire securities law firm to represent you. Our team of savvy excessive trading attorneys, legal assistants, and others have over a century’s worth of combined experience in securities law and the securities industry.

We know how to maximize your chances for a full recovery. A churning lawsuit is not something you want to pursue without skilled excessive trading lawyers by your side.

Call our Churning Attorneys at (800) 259-9010 today or contact us online.