Newport Coast Securities Brokers Commit Churning Fraud

We are currently investigating New York based Newport Coast Securities brokers Douglas Leone, Marc Arena, Tyler Luckey, Andre LaBarbera, David Levy, Antonio Costanzo and Donald Bartelt. From approximately 2008 to 2013 these brokers allegedly committed churning fraud. They provided unsuitable investment recommendations involving inverse and/or leveraged ETFs , ETNs and Exchange Traded Products (ETPs). Many of their clients were elderly and/or retired, and had limited investment experience, risk tolerance, income, and net worth. The most common definition of churning, or a churned account, is when a financial advisor overtrades the securities in his customer’s account for the purpose of generating commissions.

Churning is a synonym for over-trading where a stockbroker advances his or her interests over the interests of the client. According to FINRA these particular brokers conducted extraordinary amounts of in-and-out trading and their customer accounts were highly margined and often concentrated in one security. In addition, these particular broker’s direct supervisors witnessed these events and did nothing to intervene. It was upper management who directly profited from excessive fees generated by churned client accounts. According to FINRA, after notices were issued to Levy and Costanzo, they attempted to dissuade clients from cooperating with FINRA’s investigation. Costanzo offered to compensate a customer for his losses but conditioned his offer on the client’s signing a letter stating that he would not testify at a hearing.

To learn about legal choices for recovering securities fraud losses with Newport Coast Securities through FINRA arbitration on a contingency fee basis, please call our law firm for a free evaluation at 312–332–4200.