MATTHEW MEEHAN SUED BY FINRA
Have you lost money with financial advisor Matthew Meehan of Garden City, New York? We are investigating allegations made by FINRA (the Financial Industry Regulatory Authority) against Matthew Meehan, a former advisor at E.J. Sterling LLC.
FINRA alleged that Matthew Meehan and engaged in excessive trading (churning) and discretionary trading. FINRA alleged that three of Meehan’s customers had account turnovers of 12, 21, and 32 respectively, and they had cost equity ratios of 54%, 110%, and 179%. FINRA suspended Meehan from the securities industry for one year, fined him $15,000, and ordered him to pay $21,813 in restitution to the three customers.
Excessive Trading or Churning
One of the most common ways to determine whether an account was excessively traded or churned is to determine the annual turnover ratio. This ratio shows how often the securities in the account are bought or sold within a year. Authority has held that an annual turnover of 4 or more is a “presumption” of churning, and an annual turnover of 6 or more is a “conclusion” of churning. Thus, if the accounts had turnovers over 12, then there would be a conclusion that there was churning or excessive trading.
Another way to determine whether there was excessive trading is the cost equity ratio. This ratio takes the commissions generated by the trading, divided by the average value of the account. This ratio essentially determines the returns that an account needs to make just to break even. Thus, an account with a cost-equity ratio of 110% would need to earn 110% just to break even from all the costs of trading.
Matthew Meehan was a financial advisor and registered representative of E.J. Sterling LLC from November 2011 to October 2015. He worked at a branch office in Garden City, New York. Meehan’s BrokerCheck report discloses that he was the subject of one customer complaint, alleging investment losses in Truecar, Inc.
Brokerage firms like E.J. Sterling LLC have a responsibility to adequately supervise all representatives who are registered through their firm. Brokerage firms also must take steps to ensure that their financial advisors follow all securities rules and regulations, as well as internal firm policies. When brokerage firms fail to adequately supervise their registered representatives, they may be liable for investment losses sustained by customers.
Israels & Neuman PLC is a securities and investment fraud law firm with offices in Denver, Colorado, the Seattle area, Chicago, and Ann Arbor, Michigan. We represent investors in FINRA arbitration proceedings in all 50 states, including numerous investors in New York in the past. Our attorneys have represented over one thousand investors against many brokerage firms in the past.
Click to view: Meehan, Matthew FINRA AWC
Click to view: Meehan, Matthew BrokerCheck 1.11.17
HAVE YOU LOST MONEY WITH MATTHEW MEEHAN OR E.J. STERLING, LLC?
CONTACT ISRAELS & NEUMAN, PLC FOR A FREE CASE EVALUATION
Aaron Israels: (720) 599-3505
David Neuman: (206) 795-5798
Israels & Neuman, PLC is a private law firm and is not affiliated with any government or law enforcement agency. Any investigation referenced in this blog is independent in nature and is being conducted by our law firm privately, not in conjunction with any government or law enforcement agency. All information contained in this blog should be deemed statements of opinion derived from the author’s review of public records, not statements of fact. This blog is advertising material and does not create an attorney client relationship, nor does it constitute legal advice. Everyone’s situation is different and the question of whether or not you have a claim will vary on a case-by-case basis. In contingent representation, clients may still be liable for costs.