TEPHEN SLOANE CRD#: 1257601, a broker currently with WestPark Capital of New York, NY, and formerly with Morgan Stanley also of New York, had a complaint filed against him by the Financial Industry Regulatory Authority’s Department of Enforcement. FINRA filed the complaint on July 20, 2020, alleging Sloane recommended costly and unsuitable investments for his clients while representing both of the firms.
According to FINRA, from January of 2014 to January of 2018, STEPHEN SLOANE allegedly recommended an unsuitable investment strategy to 14 retail clients.
FINRA alleges in the complaint that STEPHEN SLOANE recommended clients engage in active, short-term trading of U.S. Treasuries with 10 and 30-year maturities, without conducting reasonable diligence to understand the effect of the strategy’s costs on the clients’ potential returns. The complaint alleges Sloane did not have a reasonable basis to recommend the strategy and did not do any research or seek any guidance about whether the trading strategy could be profitable at the costs the clients paid.
The FINRA complaint also alleges, STEPHEN SLOANE made no attempt to calculate either the returns he expected to generate from active trading or whether those returns would break even with the costs of his trading strategy. Sloane allegedly received approximately $220,000 in compensation from implementing his strategy for the clients, representing his share of the $510,025 in markups and markdowns he charged to execute the trades for the clients, and after paying markups, markdowns, and other service fees, the clients realized total trading losses, exclusive of interest, of $329,811, as a result of Sloane’s investment strategy, according to FINRA.
STEPHEN SLOANE was discharged from Morgan Stanley, according to FINRA’s BrokerCheck, in February of 2016, following “Allegations concerning cost-related issues associated with registered representative’s trading of U.S. treasuries.”
According to FINRA, STEPHEN SLOANE then moved to WestPark Capital, which is based in Boca Raton, Florida, where he allegedly continued executing the same unsuitable strategy.
FINRA’s complaint also alleges that Sloane charged excessive and unfair markups. Sloane recommended that some clients use the proceeds from sales of treasury securities to purchase treasury securities the following day. The markups resulted in those clients’ trades on those days occurring at prices not reasonably related to prevailing market prices.
According to FINRA, Sloane allegedly executed 546 Treasury transactions in the clients’ accounts, and more than 40% of the clients’ sales of 10- and 30-year Treasury securities during the period occurred within just three months of the purchase and more than three-fourths happened within just nine months of purchase.
According to FINRA’s BrokerCheck, available on FINRA’s website, STEPHEN SLOANE has 7 Disclosures on his CRD report. Of the 7 Disclosures, 4 are Customer Disputes of which all settled in favor of the client. Sloane has been registered in the securities industry for 28 years and was listed with 5 firms. He is currently with the following firm since March 10, 2016:
WESTPARK CAPITAL, INC.
126 E. 56th Street 3rd Floor
NEW YORK, NY 10022
Sloane was previously listed with:
06/01/2009 – 03/30/2016 MORGAN STANLEY – NEW YORK, NY
If you’ve experienced financial losses due to the recommendations or actions of STEPHEN SLOANE, currently with WESTPARK CAPITAL and formerly with MORGAN STANLEY, both of New York, NY, contact an experienced securities lawyer at Soreide Law Group at no cost, regarding the possible recovery of your investment losses through a FINRA arbitration at: 888-760-6552.
Soreide Law Group works on a contingency fee basis and represents clients nationwide before FINRA.