Did you lose money investing with Stephen Sloane (CRD# 1257601)?
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing with Stephen Sloane. If you suffered losses investing with Stephen Sloane, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim.
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
As of March 16, 2023, Stephen Sloane’s FINRA BrokerCheck Report contains the following:
BARRED: FINRA has barred this individual from acting as a broker or otherwise associating with a broker-dealer firm.
Disclosure Events
5 Customer Disputes
1 Regulatory Event
1 Employment Separation After Allegations
January 5, 2021 – An OHO decision became final in which Sloane was barred from association with any FINRA member in all capacities and ordered to pay $175,823.03, plus interest, in restitution to customers. The sanctions were based on findings that Sloane recommended to customers, most of which were over 65 years of age, an unsuitable investment strategy involving short-term trading of 10-year and 30-year treasuries without having a reasonable basis to do so. The findings stated that Sloane recommended to the customers that they buy treasuries in the secondary market, then wait for some event that would cause treasury prices to rise. When Sloane determined that such an event had occurred, he recommended selling the securities and using the sales proceeds to repeat the process by buying other treasuries. One of Sloane’s member firms conducted reviews of his trading activity in his customer accounts after spotting costly trading activity. The firm met with Sloane and instructed him to reduce the costs and frequency of his trading, and he temporarily complied with the directive. The firm later discovered Sloane had resumed his active trading in treasuries. After terminating Sloane, the firm retroactively reduced the markups and markdowns he had charged the customers, crediting them $78,727. Sloane moved to another firm, with twelve of the customers following him, where he pursued the same trading strategy in treasuries. Before making the recommendations, Sloane did not perform the reasonable diligence required to provide him with a reasonable basis to recommend the strategy. Sloane failed to consider the effect of the strategy on the customers’ investment returns and did not conduct research, and made no calculations, to determine if the strategy would be profitable given the costs the customers incurred as a result of the active trading he recommended. As a result, Sloane lacked an understanding of the potential risks and rewards associated with his recommended investment strategy. Sloane had to have known that the frequent trading was generating significant markups, markdowns and commissions that would outweigh any potential profits to the customers. Sloane earned commissions of approximately $220,000 at his customers’ expense and the customers incurred $329,811 in trading losses. Notwithstanding payments Sloane’s previous firm made to customers, half of the customers still have outstanding losses of $175,823. The findings also stated that Sloane charged customers unreasonable markups and markdowns. For each set of transactions for the customers, Sloane used the proceeds of the customers’ sales of treasuries to buy other treasuries the next day. The customers’ purchases, therefore, were executed about the same time as the customers’ sales. The markups and markdowns Sloane charged for the transactions were unreasonable, unfair and excessive after considering all the circumstances, including the nature of the widely traded treasuries. The markups and markdowns the customers paid resulted in trades that did not take place at prices reasonably related to prevailing market prices. (FINRA Case #2016049414401)
Current and Previous Registrations
03/10/2016 – 08/21/2020 WESTPARK CAPITAL, INC. (CRD#:39914) NEW YORK, NY
06/01/2009 – 03/30/2016 MORGAN STANLEY (CRD#:149777) NEW YORK, NY
06/29/1999 – 06/01/2009 CITIGROUP GLOBAL MARKETS INC. (CRD#:7059) NEW YORK, NY
05/01/1992 – 06/09/1999 DEAN WITTER REYNOLDS INC. (CRD#:7556) PURCHASE, NY
05/04/1984 – 01/31/1985 DONALD SHELDON & CO., INC. (CRD#:6966)
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
Due Diligence Requirement
FINRA requires broker’s to conduct due diligence on investments and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. FINRA Rule 2111(a) states that “a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. Brokers and the brokerage firms they work for that fail to conduct adequate due diligence on investments they recommend or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
If you suffered losses and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
Request a Free Consultation with a Securities Attorney
If you suffered losses investing with Stephen Sloane and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
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Galvin Legal, PLLC is a national securities arbitration, securities mediation, securities litigation, securities fraud, securities regulation and compliance, and investor protection law practice. For more information on Galvin Legal, PLLC and its representation of investors, please visit www.galvinlegal.com or call 1-800-405-5117.
