FINRA Has Brought An Enforcement Action Against Spartan Capital Broker, James Flower, For Excessive Trading
James Flower a/k/a Jim Flower (CRD # 2817701) is a Financial Advisor at Spartan Securities in Garden City, New York. James Flower a/k/a Jim Flower has been in the securities industry since 1997 and previously worked for a number of brokerage firms, including ten brokerage firms that have been expelled from the industry by FINRA.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on April 10, 2020, FINRA filed an enforcement action against James Flower a/k/a Jim Flower, alleging that he “churned and excessively traded five customers’ accounts.” The 2020 regulatory action alleges “Flower’s trading in these customers’ accounts resulted in annualized cost-to-equity ratios ranging from 69% to 176%, annualized turnover rates from 16 to 33, and realized losses totaling over $220,000 while generating more than $210,000 in commissions and fees. Flower’s churning and excessive trading made it virtually impossible for any of these customers to make a profit.”
For a copy of the FINRA complaint, click https://www.finra.org/sites/default/files/fda_documents/2017052701101%20James%20W.%20Flower%20CRD%202817701%20Complaint%20va.pdf
This is not James Flower’s first regulatory infraction. “In June 2017, Flower entered into a Letter of Acceptance, Waiver and Consent for violating FINRA Rules 2111 and 2010. Flower recommended that thirteen of his customers invest in a security known as the iPath S&P 500 VIX Short Term Futures ETN, a highly volatile exchange-traded note, without having a reasonable basis for recommending the transactions. Flower consented to a three-month suspension from association with any FINRA member firm in any capacity and agreed to attend and satisfactorily complete 10 hours of continuing education concerning complex products.”
In addition, James Flower has been the subject of four customer complaints during his career.
• September 2015—”The Client alleges churning and unsuitability from May 2014 to July 2015.” The matter was settled for $45,000.
• September 2015—”Client alleges over-concentration, unsuitability, excessive use of margin and churning from November 2014 to March 2015.” The complaint alleged damages of $250,000.
• April 2010—”MISREPRESENTED THE CHARACTERISICS AND RISKS ASSOCITED WITH MULTIPLE PURCHASES OF A ETF, FAILED TO EXECUTE A STOP LOSS ORDER AND MISREPRESENTATION OF THE UTILIZATION OF MARGIN.” The matter went to a final arbitration hearing and the customer was awarded $67,500. James Flower was dismissed from the case prior to the arbitration award.
For a copy of James Flower’s CRD, click https://brokercheck.finra.org/individual/summary/2817701#disclosuresSection
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
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