Rep Churned Senior Business Owner's Account, Violated Reg BI: FINRA

For example, in April 2020, "Krapf recommended that the customer purchase nearly $180,000 of stock in a biotechnology company, and then recommended that the customer sell the position two days later. Krapf charged commissions on the round-trip transaction of $7,800," the order said.

"The next day, Krapf recommended that the customer purchase nearly $82,000 in a semiconductor company and, that same day, sell the position for a loss, while charging the customer commissions of $2,000," according to FINRA.

Between October 2019 and April 2022, Krapf recommended 58 transactions in the customer's account, resulting in an annualized turnover rate of 23 and an annualized cost-to-equity ratio of 104%, the order states.

A turnover rate of 6 or higher or a cost-to-equity ratio above 20% generally indicates an excessive series of transactions, according to the regulator.

Krapf's trading in the customer's account, FINRA said, generated total trading costs of $96,496, including $92,847 in commissions, and caused $41,017 in total realized losses.