Former Broker Donald A. DeVito II Accused of Churning and Unauthorized Trading
Donald A. DeVito II, a former Wells Fargo stockbroker, has been accused of churning and unsuitability in a recent customer complaint filed in May 2017.
Regulatory documents show that Donald DeVito was terminated from Wells Fargo in late 2016 because of “concerns related to the level of trading in accounts.” He is not currently registered with any investment firm.
Mr. DeVito has previously been the subject of at least five other customer complaints that ultimately settled. The combined settlement amounts for the five previous complaints total approximately $600,000.
Churning is Illegal
When a broker engages in excessive trading to generate commissions, they breach their obligation to put their client’s interests first. This “churning” of investments is against the law and cost clients additional fees that can eat away at their money.
Sometimes brokers and firms claim that clients agree to excessive trading because they have indicated they have an “aggressive” risk tolerance. However, if the main goal of the broker or firm is to generate fees through excessive buying and selling of stock, it is churning.
How to Spot Churning
Evidence of churning can be found in investor accounts. It can include brokers selling well-performing stocks while keeping low-performing stocks in their client portfolios. It looks like the investment portfolio is doing well because of the selling, but in reality, the broker is charging fees and filling the portfolio with low-performing stocks.
An experienced investment attorney can help you if you believe you have been a victim of churning. Call the attorneys at Meyer Wilson for a free and confidential case evaluation.