Broker John Crook Hit With Complaints of Excessive Trading, Unsuitability, Others
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 financial gain.
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 confidential consultation.