- January 6, 2023
- Joseph Stone Capital
Leonid Yurovsky (CRD#: 4554905) is a registered Broker at Joseph Stone Capital, LLC in Mineola, NY.
He entered the securities industry in 2002 and previously worked for PHX Financial, Inc.; National Securities Corporation; John Thomas Financial; Laidlaw & Company (UK) LTD.; Gunnallen Financial, Inc.; J.P. Turner & Company, LLC; LaSalle St. Securities, LLC; Brookstreet Securities Corporation; Raike Financial Group, Inc.; S.W. Back & Company; HSBC Brokerage (USA), Inc.; American Express Financial Advisors, Inc.; and IDS Life Insurance Company.
Current And Past Allegations Of Conduct Leading To Investment Loss
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in December 2022, FINRA sanctioned Leonid Yurovsky with an order to pay restitution of $10,648.61, and a suspension from all capacities for five months beginning January 17, 2023 and ending June 16, 2023. The FINRA sanction states, “Without admitting or denying the findings, Yurovsky consented to the sanctions and to the entry of findings that he excessively and unsuitably traded customer accounts. The findings stated that Yurovsky recommended that a customer, a farmer with limited investment experience, place trades in his account. The customer’s average monthly equity in his firm account was approximately $158,600, yet Yurovsky’s recommended trades resulted in the customer paying approximately $165,000 in commissions and other trade costs. Collectively, Yurovsky’s recommendations resulted in an annualized cost-to-equity ratio of approximately 30 percent. Further, Yurovsky recommended that a senior customer place trades in his account. In several instances, Yurovsky recommended that the senior customer sell a security shortly after purchasing it, even though Yurovsky’s recommendation to purchase the security had resulted in paying a substantial commission. Although the senior customer’s account had an average monthly equity of approximately $42,000, Yurovsky’s recommended trades caused him to pay over $10,600 in commissions and other trade costs and resulted in a cost-to-equity ratio of approximately 25 percent. Both customers relied on Yurovsky’s advice and accepted his recommendations. Those recommended transactions, which collectively resulted in the customers paying approximately $175,600 in commissions and other charges, were excessive and unsuitable.”
For a copy of the FINRA sanction, click here.
In addition, Leonid Yurovsky has been the subject of three other disclosures, including the following:
- September 2021 — “Wells Notice examination #20200668884: FINRA made a preliminary determination to recommend that disciplinary action be brought against Leonid Yurovsky alleging Willful Violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and FINRA Rules 2020 and 2010 for churning customer accounts; Violation of FINRA Rules 2111 and 2010 for making trades that were excessive and/or quantitatively unsuitable in light of customer investment profiles; Violation of FINRA Rules 2111 and 2010 for making unsuitable recommendations to trade on margin; and Violation of FINRA Rule 2010 for making trades and trading on margin without customer authorization.” An investigation was initiated by FINRA.
- December 2014 — “1.YUROVSKY, CRD NO. 4554905, IS A NEW YORK RESIDENT WHO WAS REGISTERED WITH THE ARKANSAS SECURITIES DEPARTMENT (“DEPARTMENT”) FROM NOVEMBER 3, 2010, TO JUNE 18, 2013. YUROVSKY HAS NOT BEEN REGISTERED WITH THE DEPARTMENT IN ANY CAPACITY SINCE HIS REGISTRATION LAPSED ON JUNE 18, 2013. 2.ON MARCH 4, 2011, YUROVSKY OPENED A JOINT ACCOUNT ON BEHALF OF ARKANSAS RESIDENT ONE (“AR1”) AND ARKANSAS RESIDENT TWO (“AR2”). THE STAFF CONTENDS THAT YUROVSKY ENGAGED IN EXCESSIVE TRADING AND UNSUITABLE SECURITIES SALES WHILE ACTING AS THE AGENT FOR AR1 AND AR2. ALTHOUGH DOCUMENTARY EVIDENCE INDICATED THAT AR1 AND AR2 HAD FILLED OUT PAPERWORK MARKING THE CHARACTER OF THE ACCOUNT AS “SPECULATIVE” AND THEIR RISK TOLERANCE AS “AGGRESSIVE,” AR1 CONTENDED THAT HE INFORMED YUROVSKY PRIOR TO OPENING THE ACCOUNT THAT HE WAS ONLY INTERESTED IN CONSERVATIVE INVESTMENTS AND COULD NOT AFFORD TO LOSE VALUE IN THE ACCOUNT. THE ACCOUNT STATEMENTS REVIEWED BY THE STAFF REFLECTED THAT FROM MARCH 2011 THROUGH OCTOBER 2012 THE ACCOUNT LOST VALUE WHILE BEING CHARGED A TOTAL OF $106,817.25 IN COMMISSIONS, ADDITIONAL COMMISSIONS, AND SETTLEMENT FEES. 3.THE STAFF FURTHER CONTENDS THAT YUROVSKY ENGAGED IN UNSUITABLE SECURITIES SALES WHEN HE TWICE SOLD NON-TRADITIONAL EXCHANGE TRADED FUNDS (ETFS) TO AR1 AND AR2 AND HELD THEM IN THE ACCOUNT FOR LONGER THAN ONE DAY. THE ETFS TRADED BY YUROVSKY WERE ISSUED BY PROSHARES. THE PROSHARES PROSPECTUSES STATE THAT THE ETFS “RESET” DAILY, MEANING THEY ARE DESIGNED TO ACHIEVE THEIR DESIRED OBJECTIVE ON A DAILY BASIS AND THE EFFECTS OF COMPOUNDING PRESENT UNIQUE RISKS OVER LONGER HOLDING PERIODS. ON NOVEMBER 11, 2011, YUROVSKY PURCHASED PROSHARES TRUST ULTRASHORT AND HELD IT IN THE ACCOUNT OF AR1 AND AR2 UNTIL IT WAS LIQUIDATED AT A LOSS ON NOVEMBER 20, 2011. ON AUGUST 21, 2012, YUROVSKY AGAIN PURCHASED PROSHARES TRUST ULTRASHORT AND HELD IT IN THE ACCOUNT OF AR1 AND AR2 UNTIL IT WAS LIQUIDATED AT A LOSS ON SEPTEMBER 19, 2012.” The regulatory action initiated by the State of Arkansas was resolved through consent and Leonid Yurovsky was sanctioned with undertaking.
- April 2013 — “CUSTOMERS ALLEGES UNSUITABILITY AND MISREPRESENTATION.” The customer dispute was settled for $55,000.
For a copy of Leonid Yurovsky’s FINRA BrokerCheck, click here.
We Help Investors Recover Investment Losses
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.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.
Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s age, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.
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