On July 28, 2014, the Financial Industry Regulatory Authority (FINRA) Department of Enforcement filed an action against Newport Coast Securities, Inc. and five of its brokers for churning customer accounts. FINRA Case # 2012030564701.
In the complaint, FINRA alleges that Newport Coast and five of its brokers, Douglas Leone, Andre LaBarbera, David Levy, Antonio Costanzo and Donald Bartelt, excessively traded and churned 24 customer accounts from September 2008 through May 2013. FINRA alleges that the misconduct was so blatant that it should quickly have drawn scrutiny from the firm's compliance personnel, who apparently looked the other way.
The misconduct cited in the complaint includes:
- cost-to-equity ratios were over 100%
- turnover rates were often over 100
- extraordinary amounts of in and out trading
- highly margined accounts
- accounts highly concentrated in a single security
- commissions exceeding 3% and sometimes 4%
- solicited trades inaccurately characterized as unsolicited
- accounts exhibited large losses
Douglas Leone worked from his home office and was a part of a Long Island branch of Newport Coast. He presently is registered with Salomon Whitney, LLC.
Marc A. Arena worked for Newport Coast in Long Island, New York. He presently is registered with National Securities Corporation.
Andre V. LaBarbera, who early in his career worked for Stratton Oakmont, worked for Newport Coast from his home in Dix Hills, New York. After leaving Newport Coast in 2012, he was registered for a brief period with IFS Securities and is currently registered with Titus Rockefeller, LLC.
David M. Levy, who also worked for Stratton Oakmont in the early 1990's, worked from a branch office of Newport Coast in West Palm Beach, FL. He is currently registered with Titus Rockefeller, LLC, Wellington, FL
Antonio Costanzo worked for Newport Coast from his home in Chesapeake, Virginia. He is currently registered with Titus Rockefeller, LLC.
Roman Tyler Luckey left Newport Coast in 11/2012 and is not currently registered.
Donald A. Bartelt is currently registered with Newport Coast and works from his home in Cave Creek, Arizona.
Churning occurs when a broker over trades an account to generate commissions for himself and his company to the detriment of the customer's best interest.
If you have questions about how your account was handled, call to discuss it with an experienced securities attorney. You may be able to recover losses through FINRA arbitration. Contingent fee representation.
561 391 1900
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.