Peter Monson, Broker for Van Clemens & Co, Under Investigation for Excessive Trading

Peter Monson is facing an investigation by FINRA concerning allegations of churning.

The Sonn Law Group is investigating allegations that Peter Monson committed misconduct. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.

Peter Monson (CRD# 2203309) is currently under investigation by FINRA. The investigation is related to a regulatory action FINRA took against Van Clemens & Co regarding allegations of high-frequency trading.

FINRA’s findings state that from June 2015 through June 2016, Van Clemens failed to establish and maintain a supervisory system and, to establish, maintain, and enforce written supervisory procedures (“WSPs”), reasonably designed to achieve compliance with FINRA’s suitability rule.

FINRA Rules require member firms to establish and maintain a supervisory system, including WSPs, reasonably designed to achieve compliance with applicable securities laws and regulations and with applicable FINRA Rules.

The findings state, 

[Van Clemens’s] WSPs did not directly address quantitative suitability and, as such, did not set forth a process or identify personnel responsible for reviewing customer accounts for potentially excessive trading. Moreover, although the WSPs contained a section entitled “churning,” which mentioned instances of high turnover in accounts controlled by a registered representative, this section and its supervisory requirements only applied to transactions executed “solely for the purpose of generating commissions.”

Thus, not only were the WSPs silent on the issue of quantitative suitability, they gave the added misimpression that evidence of quantitative unsuitability was not a supervisory concern unless the available evidence demonstrated turning, which is a distinct type of misconduct. 

FINRA found that a registered representative referred to by the initials “PM”, believed to be Monson, recommended transactions to a firm customer that resulted in the customer’s account having an annualized turnover rate above 9.0 and an annualized cost-equity ratio of 32.3%.  FINRA found this activity was excessive, given the customer’s investment objectives and financial situation, and coincided with losses in the account of more than $100,000 during the 13-month period.

According to FINRA, an excessive-trading violation requires two elements of proof: control of the account and trading that is excessive in light of the customer’s investment profile. Churning is a separate violation that requires scienter – i.e., fraudulent intent or reckless disregard of customer interests – in addition to the same two elements, control and excessiveness, required to prove excessive trading. 

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The Sonn Law Group is currently investigating allegations of misconduct. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.