SANCTIONS BROUGHT AGAINST JP TURNER FOR CHURNING

The SEC brought proceedings that arise out of a failure reasonably to supervise three registered representatives (the “Registered Representatives”) with a view to preventing and detecting their violations of federal securities laws by JP Turner. Between January 1, 2008 and December 31, 2009 (the “relevant period”), for the purpose of generating commission business, these registered representatives “churned” the accounts of seven customers (collectively, the “affected customers”) by engaging in excessive trading in disregard of the customers’ investment objectives and financial needs. Consequently, these customers paid approximately $845,000 in commissions, fees, and margin interest to JP Turner. During the relevant period, William Mello, as President of JP Turner, was ultimately responsible for establishing JP Turner’s supervisory policies and procedures, and a system to implement these policies and procedures designed to prevent and detect violations by the firm’s registered representatives of the securities laws, rules and regulations. JP Turner and Mello failed to establish procedures and systems reasonably designed to prevent and detect the churning of customer accounts. Although JP Turner had a monitoring system to identify actively traded accounts based primarily on “return on investment” (“ROI”) levels, i.e., the level of fees and commissions as a percentage of account equity, the system imposed few requirements on, and no meaningful guidance for supervisors in terms of reviewing these accounts and taking meaningful action to investigate the trading activity.

JP Turner is an Atlanta, Georgia based limited liability company that has been registered with the Commission as a broker dealer since 1997. JP Turner has approximately 513 independent contractor registered representatives working out of over 203 branch offices that are located throughout the United States. These branch offices, organized as licensees, include 54 offices of supervisory jurisdiction.

During the relevant period, the Registered Representatives collectively “churned” the accounts of seven customers by knowingly or recklessly engaging in excessive trading in disregard of the customers’ investment objectives and financial needs for the purpose of generating commission business. The misconduct generated commissions, fees and margin interest totaling approximately $845,000. JP Turner retained approximately $200,000 of this amount.

Here is link to the SEC action.

http://www.sec.gov/litigation/admin/2012/34-67808.pdf

If you were churned by a JP Turner broker call Soreide Law Group for a free consultation at (888) 760-6552.