Financial advisor Leonid Yurovsky has been suspended from the securities brokerage industry for 5 months by industry self-regulator FINRA after an investigation led to findings that Yurovsky excessively and unsuitably traded two customer accounts. Yurovsky has been associated with the brokerage firm Joseph Stone Capital since 2016.
According to FINRA, Yurovsky recommended that one of the customers, a farmer with limited investment experience, place 252 trades in his Joseph Stone investment account from June 2016 through November 2019. During that period, the customer reportedly had an average equity position of $158,600, but paid Yurovsky and Joseph Stone approximately $165,000 in commissions and other trade costs. In light of the commissions and fees, the customer would have required an annualized return of 30% just to break even. According to FINRA, Yurovsky advised the second customer, who was a senior investor, to place 41 trades in his account between July and December 2016. Yurovsky reportedly recommended that the customer sell some of the stocks shortly after purchasing them, even though Yurovsky’s recent recommendations to purchase the stocks had resulted in the customer paying a substantial commission.
Suitability / Regulation Best Interest
Financial advisors have a duty to recommend suitable investments and investment strategies to their clients and otherwise act in their clients’ best interests. A recommendation is only suitable if it comports with the client’s investment objectives, risk tolerance, investment experience, investment time horizon, liquidity needs, and income needs. Together these considerations form the investor’s unique “investment profile.” The duty to recommend suitable investments cannot be disclaimed through risk disclosures or waivers.
Excessive trading, also known as churning, is “the excessive buying and selling of securities in a customer’s account by a broker, for the purpose of generating commissions and without regard to the customer’s investment objectives or interest or with the intent to defraud.” It is actionable under the common law (negligence or fraud) and under securities laws, including Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.
If you have suffered losses as a result of the misconduct or malpractice of Leonid Yurovsky, we may be able to assist you. Call us toll free at 888 607 4819 for a free, no-obligation consultation and case evaluation.