Federal regulators on Monday accused three former brokers of an Atlanta-based firm of earning handsome fees by defrauding customers of about $2.7 million through a fraudulent practice called “churning.”
The Securities and Exchange Commission said that Ralph Calabro, Jason Konner and Dimitrios Koutsoubos ignored the conservative objectives of seven customers and instead engaged in excessive trading that generated them about $845,000 while working at JP Turner & Company between January 2008 and December 2009.
Regulators also accused the firm, its president William Mello and head supervisor Michael Bresner of compliance failures. The company has agreed to pay about $415,000 in penalties and a share of the fees earned by the fraud, but settled the charges without admitting or denying the SEC’s findings.
The three brokers are no longer with the company, and Bresner has been shifted to a non-supervisory role, company spokeswoman Heidi Wheatley said. Bresner also was fined $25,000 in 2004 for failing to properly supervise brokers while he was working for a Seattle-based firm.
Mello also has been suspended from acting in a supervisory role and was fined $45,000, authorities said. Mello, a co-owner of the firm, is no longer president but is still a partner.
Wheatley said the firm has cooperated fully with SEC investigators and has agreed to hire an independent consultant to review its procedures.
“We look forward to moving forward,” she said.
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