John Nelson Crook is a stockbroker with a history of customer complaints
against him. He has been accused of misrepresentation, engaging in excessive
and unauthorized trading, recommending unsuitable investments, breaching
his fiduciary duties, and breaching contracts.
John Crook has been a stockbroker since 1996 and is currently employed
at Prospera Financial Services Inc. In the past, he has been employed
by Raymond James and Associates Inc., Morgan Keegan and Company Inc.,
and Citigroup Global Markets Inc.
While employed at Raymond James and Associates Inc., he allegedly chose
not to respond candidly to a supervisor’s review of his trading
activity. Because of this, he was let go from the company in July 2015.
According to a recent report from the Financial Industry Regulatory Authority
(FINRA), a corporate self-regulatory agency of the financial industry,
the most recent complaint against John Crook was received in November
of 2015. It is pending and concerns a customer dispute with $4 million
in alleged losses. The complaint is for allegations of excessive trading,
unauthorized trading, and of churning with intent to gain additional commissions.
The customer is seeking compensatory damages plus attorney’s fees
and costs of litigation. The allegations in this dispute have not been
proven, nor has John Crook accepted responsibility for any actions that
might have contributed to the $4 million loss.
What is Excessive Trading?
The ethics of the stockbroking industry require that when a broker takes
on a new client—an investor—they keep the goals and needs
of that investor first. This is referred to as their fiduciary duty. Dishonest
brokers may breach or break this responsibility in the name of their own
One of the ways that a less-than-upright financial professional does this
is by engaging in the practice of excessive trading or churning. Excessive
trading—a flurry of activity buying and
selling stocks—can serve the interest of the broker by generating
commissions for himself or herself.
If a stock is not gaining value or earning income, a broker should advise
a client to sell the poorer performing stock and buy shares in a company
with a promising financial future. Clues to excessive trading, however,
are often earmarked by brokers advising the opposite—well-performing
stocks are sold and poorer stocks are held onto indefinitely. The purpose
of this is to gain commissions. The investor is left with a portfolio
of duds, so to speak. Once the good performers have been sold off and
commissions deducted, the losses can be significant.
If you believe you have been the victim of excessive trading or churning,
contact the experienced attorneys at Meyer Wilson today for a free and