January 9, 2017

The SEC brought fraud charges against Gregory T. Dean and Donald J. Fowler, two New York-based brokers, for using an “in-and-out” trading strategy to generate hefty commissions for themselves despite the fact that the strategy was unsuitable for their customers. The SEC’s complaint alleges that Dean and Fowler did not conduct reasonable diligence to determine whether their investment strategy, which involved frequent buying and selling of securities, could deliver even a minimal profit to their customers. Their strategy, which generally involved selling securities within a week or two of purchase, and charging customers a fee for each transaction, allegedly resulted in substantial losses for at least 27 customers. The SEC also issued an Investor Alert warning about excessive trading and “churning” that can occur in brokerage accounts. SEC

Tagged in: Financial and Investment Fraud, Market Manipulation and Trading Violations,