FINRA Charges Broker Jim Flower With Churning, Excessively Trading

The Financial Industry Regulatory Authority (“FINRA”) reports troubling allegations of misconduct by securities broker Jim Flower (CRD#: 2817701, Garden City, New York). Notably, FINRA filed an enforcement action against Flower for alleged sales practice violations including unsuitable recommendations and churning. Not only that, but at least four clients brought disputes about the securities broker. Here’s what we know so far.

FINRA Department of Enforcement Charges Jim Flower With Churning

Apparently, in April 2020, FINRA brought an enforcement action against Jim Flower alleging violations of FINRA rules and Securities Exchange Act. Notably, FINRA says that from 2016 to 2018, Flower excessively traded and churned no less than five accounts held by clients of SW Financial – a Melville, New York firm that Flower worked for from 2015 to 2019.

It appears that clients had extremely high cost-to-equity ratios and annual turnover rates because of Flower’s trading. Allegedly, Flower caused the clients more than $220,000 in realized losses. But Flower made $210,000 from those clients between commission and fees. FINRA makes clear that Flower put clients in a position where it was next to impossible for them to make a reasonable return on their investments. Not only that, but FINRA says that Flower also made unauthorized trades, adding insult to injury. It is possible that Flower may be barred as a securities broker depending on the outcome of this matter.

FINRA Issues Flower 3-Month Suspension For Unsuitable Recommendations

Notably, FINRA went after Jim Flower in 2017 for allegedly making bad investment recommendations to clients. Evidently, Flower resolved FINRA’s allegations of his poor advice by accepting the suspension. Namely, Flower did not contest FINRA’s findings of him unreasonably recommending that 13 of his clients invest in volatile, risky exchange-traded notes (ETNs). Supposedly, Flower made his recommendations based on his misunderstanding of the underlying benchmark index of the ETN. Evidently, clients sustained nearly $249,000 in losses because of Flower’s actions. Some mistake!

Clients Indicate That Jim Flower Was Churning, Selling Unsuitable Investments

Apparently, Jim Flower used to work for Laidlaw until 2015. Evidently, a client of Laidlaw took aim at Flower in 2015 regarding stock and OTC equities losses. Supposedly, Flower churned the client’s investment account. Not only that, but the client alleged that Flower’s trading conflicted with the client’s goals, risk tolerance or other suitability criteria. For this reason, Laidlaw settled with the client through making a $45,000 payment.

BrokerCheck shows that a second Laidlaw client brought suit in 2015 to recover investment losses allegedly caused by Jim Flower. Mainly, the client indicated that Flower concentrated the client’s assets in risky and unprofitable investments. Not only that, but Flower supposedly made excessive use of margin for unsuitable trades. Also, this client suggested that Flower was churning like the other Laidlaw client had alleged. For this reason, the client demanded $250,000.

FINRA BrokerCheck indicates that Jim Flower denies all allegations of misconduct.

Did Flower Sell You Unsuitable Investments?Lars Soreide AVVO 2020 Top Lawyer

Experienced losses due to Jim Flower? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The law firm has recovered millions of dollars for clients who have suffered losses due to misconduct of brokerage firms and individuals like Flower.