Regulators are investigating Spartan Capital Securities for investment fraud complaints and FINRA regulators have also taken action. These issues include excessive trading and compliance failures. Bakhtiari & Harrison helps people affected by investment fraud at Spartan Capital Securities. They are focused on guiding clients through the legal process.
This blog discusses Spartan Capital Securities and the regulatory actions taken in response to the accusations made against them. If these actions have affected you, the blog also offers information on what you can do.
What is Spartan Capital Securities?
Spartan Capital Securities, LLC in New York provides investment options and advisory services as a financial services firm. The firm must follow strict rules as a broker-dealer regulated by FINRA and the SEC.
Some people have complained. Regulators are worried. They think the company is not following the rules. They may not be looking out for clients.
Complaints Against Spartan Capital Securities
Numerous complaints have been filed against Spartan Capital Securities, accusing the firm of various forms of misconduct. Since 2017, FINRA, state regulatory organizations, and individual investors have raised allegations of fraud, negligence, and breach of fiduciary duty. Key issues include:
Churning and Excessive Trading
Churning involves excessive trading in a client’s account to generate commissions rather than advance the client’s investment goals. This unethical practice directly contradicts the principle of acting in the client’s best interest. Churning can hurt a client’s portfolio by charging unnecessary fees and making bad market moves. This can result in significant financial losses and potential tax issues from short-term gains.
Compliance Issues
Spartan Capital Securities has faced criticism for failing to comply with mandatory regulatory reporting. The company keeps putting off updating Forms U4 and U5, important papers for showing customer complaints and what happened. This lack of transparency can mislead clients and regulators about the firm’s history and customer grievances. Additionally, regulators have accused Spartan Capital Securities of misclassifying the outcomes of customer disputes, potentially misrepresenting the firm’s professional conduct and dispute resolution.
How to Proceed if You’ve Been Affected
If you think Spartan Capital Securities has hurt your investments, you need to act quickly. Here’s a guide on how to protect your financial interests:
- Review Your Account Statements: Examine your transaction history for unauthorized or unusual activity.
- To spot excessive trading, watch out for lots of trades, high turnover rates, and expensive broker fees, which could be a sign of churning.
- To find complaints and regulatory actions, use resources like FINRA BrokerCheck, the SEC’s EDGAR Database, and state securities regulators. These resources can help you learn about the firm’s past and any similar issues.
- Get advice from a financial advisor or lawyer who can give personalized guidance based on your situation.
- Report an issue to FINRA if you suspect misconduct. This can start an investigation and lead to a resolution.
Regulatory Actions by FINRA
FINRA has taken significant action against Spartan Capital Securities, highlighting serious concerns about the firm’s compliance with regulatory standards. The firm’s non-compliance with reporting requirements has been a major issue, including:
Reporting Failures
Spartan Capital Securities was charged for failing to report 223 required amendments for 72 brokers, including 162 instances related to customer-initiated arbitrations. The firm also failed to disclose nine cases where customers won disputes in arbitration against its brokers. These omissions were significant in maintaining transparency and accountability in the firm’s operations.
FINRA Arbitration Case (Case No. 18-04117)
This case involved serious allegations, including breach of fiduciary duty, churning, unauthorized trading, and lack of supervision. The arbitration concluded with Spartan Capital Securities being ordered to pay the complainant $15,806.45.
Spartan Capital Securities was fined $600,000 for not following the rules properly. They also had to hire an outside consultant to improve their supervision. John Lowry and Kim Monchik, key executives, were fined and suspended from associating with any FINRA member firm for two years. These actions underscore the severity of the firm’s regulatory violations.
Can You Sue Spartan Capital Securities?
If Spartan Capital Securities caused you financial losses, you may be able to get compensation by taking legal action. Contracts with financial companies often include arbitration clauses. These arbitration clauses require parties to resolve disputes through FINRA arbitration rather than traditional court proceedings. Here’s what you can do:
- Understand Your Rights: Investors are entitled to ethical management of their investments. If Spartan Capital Securities or its employees caused you to lose money, you may be able to get compensation.
- Consult a Investment Fraud Attorney: Working with an attorney specializing in securities law and investment fraud is crucial. They can evaluate your case, guide you through the arbitration process, and help you present your claims effectively.
- Prepare for FINRA Arbitration: Gathering evidence and preparing a strong case is vital for a successful arbitration outcome. Your attorney will assist in collecting necessary documentation and formulating a compelling argument.
- Avoid Direct Negotiation Without Representation: It’s advisable to have legal representation when dealing with Spartan Capital Securities. An experienced attorney can adequately represent your interests and prevent potential pitfalls.
Consult with Bakhtiari & Harrison
If you think Spartan Capital Securities didn’t handle your investments properly, Bakhtiari & Harrison can assist you. Specializing in securities and investment fraud, our attorneys bring extensive experience in arbitration and litigation. If you trade too much, break rules, or don’t follow regulations, we can assist you with FINRA arbitration. This can help you recover compensation for any losses you have incurred.
Trust Bakhtiari & Harrison to defend your interests against even the most formidable investment firms. Contact us today for a free consultation and learn how we can assist in recovering your investment losses.