Five Newport Coast Securities Representatives Charged with Churning and Excessive Trading

Investment fraud lawyersFrom September 2008 through May 2013, five brokers associated with Newport Coast Securities Inc., based in New York, churned the accounts of 24 customers, using highly margined and high-risk securities to generate substantial commissions while at the same time causing $1 million in damages to said customers, FINRA alleges. FINRA’s Department of Enforcement further alleges that red flags should have immediately flown sky high, as cost-to-equity ratios were often over 100%, turnover rates were often over 100, there were big numbers of transactions in which the total commission per trade exceeded 3% and, in many instances, exceeded 4%, there was a deceptive mix of riskless principal and agency trading in numerous accounts, namely, higher cost trades in which markups almost always exceeded 3%, and nearly all of the customer accounts at issue exhibited large losses.

Supervisors Turned a Blind Eye

The representatives’ direct supervisors, including Marc Arena and Roman Tyler Luckey, and Newport’s Compliance Department managers saw what was happening, but no person took any significant steps to diminish the misconduct, FINRA alleges. In fact, various members of Newport’s brass profited through overrides on these churned accounts, FINRA’s investigation notes. As a result, FINRA’s Department of Enforcement has requested that Newport face sanctions, disgorgement, and possible fines.

Investment Fraud Lawyers Investigating

The Peiffer Rosca securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting victims with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Rosca, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.

Alan Rosca (1180 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.