U.S. Securities and Exchange Commission building in Washington. (Photo: New York Law Journal) September 4, 2014. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.
The Securities and Exchange Commission charged two brokers for recommending excessive levels of trading that were costly for retail customers but lucrative for the brokers.
In separate complaints filed in federal court in Manhattan, the SEC alleges that Florida resident Emil Botvinnik and New York resident Jovannie Aquino recommended frequent, short-term trades that generated large commissions for the brokers but were almost guaranteed to lose money for their customers.
According to the SEC's complaints, Botvinnik's and Aquino's customers — a number of whom were at or near retirement age — lost approximately $3.6 million as a result of the trades while the brokers pocketed approximately $4.6 million in commissions.
"We are diligently pursuing deceitful brokers who prey on their customers," said Antonia Chion, associate director in the SEC's Division of Enforcement and chair of the Enforcement Division's Broker-Dealer Task Force. "Brokers need to ensure that the level of trading they recommend is suitable for their customers, and investors should be on the lookout for frequent trading in their accounts."
Both Botvinnik and Aquino were registered representatives at Meyers Associates LP — later known as Windsor Street Capital LP — at the time they engaged in the fraud the SEC alleges.
From June 2012 to November 2014, Botvinnik solicited at least five customers to open securities trading accounts at the firm where he was employed and assured them that he would employ a profitable trading strategy on their behalf.
