A previously registered broker and investment adviser Stuart L Pearl (also known as Stu Pearl) is the subject of a customer dispute on the allegation of the representative opening a margin trading account without the necessary approval, according to an investigation by lawyer Alan Rosca.
Investor lawyer Alan Rosca of the Rosca Scarlato LLC law firm is investigating conduct related to the customer dispute involving the previously registered broker on the allegation of unauthorized margin trading. Concerned investors are encouraged to call 888-998-0530, email arosca@rscounsel.law, or leave a message through the contact form on this page.
Former broker Stuart L Pearl was lastly registered as a broker David A. Noyes & Company, a Financial Industry Regulatory Authority (FINRA) member firm, between July 2015 and April 2019. Stuart L Pearl was allegedly in the employment of the firm during the period which he carried out the alleged conducts.
Pearl investors should note that between July 2015 and April 2019, Stuart Pearl was a registered investment adviser with Sanctuary Advisors in Chicago, Illinois. He then joined International Assets Investment Management, in Racine, Wisconsin, where he is still employed as of the date of this article.
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Customer Disputes on the Allegation of Unauthorized Margin Trading
Publicly available reports reviewed by the unauthorized trading lawyer shows that the previously registered broker Stuart L Pearl was made the subject of a recent customer dispute in May 2020 and he has was also the subject of other customer disputes showed as settled.
According to his FINRA Brokercheck Page, the customer in the recent dispute is seeking to recover $2,008,124 in damages. The customer alleged that while he was with David A Noyes, the previously registered broker had created a margin trading account on their behalf without discussing with them or getting their initial approval for such.
Stuart L Pearl Has Several Settled Customer Dispute Disclosures
According to the information on his brokercheck page, Stuart Pearl was the subject of a settled a customer dispute filed in March 2019 on the allegation that the previously registered broker put on a large hedge position on the customer’s account without the customer’s knowledge or approval. The client sought to recover $85,000 in damages from the dispute but the dispute was eventually settled for $42,500.
In February 2013, Stuart Pearl was also involved in a customer dispute on the allegation that he took de facto discretionary control over the client’s account and engaged in overtrading and heavy margin trading on the account. The client sought $300,000 in damages but the dispute was settled for $95,500 reportedly paid in settlement by Ameriprise, in addition to $9,500 paid in settlement by Citigroup Global Markets, and $9,500 paid in settlement by Morgan Stanley.
About Margin Trading
Margin trading, which usually occurs in the stock market and foreign exchange market, is the process by which an investor through an authorized broker purchases more shares of stock or other securities than the balance on their accounts. This could involve borrowing money from the brokerage firm to facilitate the trade. Margin trading could be deployed in such a way that the broker will sell off the securities purchased after the prices hit the speculated range to possibly maximize profits.
However, just as it is very possible to make a larger profit on margin trading, the investors could also be exposed to higher losses from the margin trading. As a result of this, it is usually expected that the approval and authorization of the investor is sought before creating and trading on such accounts. The authorization could translate to the awareness of the investor about the attendant risks in the process of margin trading. It should be noted that these considerations are all general, for informational purposes and do not constitute legal advice.
Pearl Has Been the Subject of Regulatory Actions
Stuart Pearl was suspended in all capacities for 45 days by FINRA in October 2017. The regulatory action was instituted on the allegations that the previously registered broker effected transactions in a customer’s account on several occasions on a discretionary basis without the prior authorization of the customer.
According to the reports on his brokercheck page, Stuart Pearl discretionarily liquidated positions in six different securities with a total principal of about $20,000 on behalf of a senior investor without the approval of the investor. The regulatory action was resolved through an Acceptance, Waiver and Consent letter signed by the broker consenting to the sanction of suspension and payment of civil and administrative penalties amounting to $7,500.
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints or allegations mentioned in this article, unless otherwise indicated. Any reader should also read the original sources hyperlinked in this blog for accuracy, including any BrokerCheck report and/or record of any disciplinary or regulatory action. Those sources are incorporated by reference into the text of this blog, and are the governing materials in case of any inconsistencies or typos in this blog.
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Securities Lawyer Investigating
The Rosca Scarlato LLC law firm represents investors who lose money as a result of investment-related fraud or broker misconduct and is currently investigating conduct related to Stuart Pearl’s customer dispute disclosures alleging unauthorized margin trading.
The firm takes most cases of this type on a contingency fee basis and advances the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.
Investors who believe they lost money as a result of conducts related to Stuart Pearl’s customer dispute on the allegation of unauthorized margin trading, may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.
