OHO Decision: Broker Barred for Churning Customer Accounts (Excessive Trading)
Michael Venturino (CRD No. 5872439) is a previously registered broker. Most recently, he was associated with Spartan Capital Securities in Garden City, New York (2018 to 2023). Mr. Venturino faced a number of different customer complaints for excessive trading (churning). One of the six complaints was filed by a resident of Florida.
In March of 2024, the Office of Hearing Officers (OHO) issued a final panel decision in his case. Michael Venturino has been permanently barred from the securities industry for excessive trading of six customer accounts and other FINRA violations (No. 2021070337501). Within this article, our Miami churning attorney discusses the case in more detail.
Background: What is Broker Churning?
Broadly explained, churning occurs when a broker engages in excessive trading of securities in a client’s account primarily to generate commissions rather than to serve the client’s investment objectives. It is an unethical practice that can deplete an investor’s portfolio through continuous buying and selling of assets—and incurring transaction costs—without any real strategy for financial gain for the client. Churning is, by definition, a form of unsuitable investment guidance.
OHO Decision: Former Spartan Capital Securities Broker Michael Venturino
The Financial Industry Regulatory Authority (FINRA) launched an investigation into alleged churning by former Spartan Capital Securities broker Michael Venturino. For his part, Mr. Venturino consistently denied any wrongdoing. He argued that his conduct amounted to “standard practice” within the securities industry. No settlement was ever reached between FINRA and this broker and the matter went before a disciplinary panel.
Upon review, the Office of Hearing Officers determined that Michael Venturino violated securities industry rules. It determined that he engaged in excessive trading (churning) of at least six different customer accounts. The panel also found willful violations of federal securities law. As part of the disciplinary action, Mr. Venturino was permanently barred from associating with any FINRA member in any capacity and he was ordered to pay $171,419 in disgorgement.
An Example of How Churning Can Undermine a Customer’s Investment Account
Imagine that an investor entrusted her retirement savings to a broker. She did so with the hope of asset preservation and reasonable growth. However, unbeknownst to her, the broker began churning her account. The broker engaged in excessive trading of stocks in order to generate high commissions. Each transaction carried significant fees—which, in turn—were deducted from the investor’s account. Over a year, despite the stock market performing well, that investor’s account may have actually lost money. All of the potential returns would have effectively been transferred to the broker in the form of commissions and fees.
Contact Our Miami, FL Churning Broker Fraud Attorney Today
At Carlson & Associates, P.A., our Miami investment fraud lawyer has the skills and experience to handle all types of claims, including excessive trading. If you suffered financial harm due to a broker’s improper churning of your account, we are here to help. Contact us today to arrange your completely confidential initial consultation. Our firm represents investors in Florida and beyond.
Source:
finra.org/sites/default/files/fda_documents/2021070337501%20Michael%20Venturino%20CRD%205872439%20Extended%20Hearing%20Panel%20Decision.pdf