New York Financial Advisor Demitrios Hallas Barred by FINRA for Churning in Customer Accounts
Posted on Monday, December 4th, 2017 at 11:47 am
Erez Law is currently investigating former Forefront Capital Markets LLC financial advisor Demitrios Hallas (CRD# 4199832) regarding excessive trading and churning in customer accounts. Hallas was registered with the following brokerage firms, to name just a few:
- PHX Financial, Inc. in New York, New York (August-December 2015)
- Forefront Capital Markets LLC in New York, New York (October 2014-July 2015)
- Santander Securities LLC in New York, New York (May 2013-June 2014)
- Aegis Capital Corp. in New York, New York (July 2012-May 2013)
- Chase Investment Services Corp. in New York, New York (June 2011-March 2012)
- PNC Investments in New York, New York (July 2010-June 2011)
- Chase Investment Services Corp. (May 2008-June 2010)
Hallas was terminated from his employment at Chase Investment Services Corp. in February 2012 regarding,” Job performance, including customer complaints alleging unauthorized trades and failure to disclose fees.”
FINRA barred Hallas in November 2017 after he failed to respond to a FINRA request for information.
In September 2017, the United States Securities and Exchange Commission (SEC) entered a final judgement against Hallas regarding allegation that from March 2014 to May 2016, he violated antifraud provisions of the federal securities laws. According to the complaint, Hallas purchased and sold daily leveraged Exchange-Traded Funds and Notes (ETFs and ETNs) in his customers’ accounts, knowingly or recklessly disregarding that these products were unsuitable. Despite the customers lack of knowledge or sophistication concerning daily leveraged ETFs and ETNs and their risks, Hallas sold 179 daily leveraged ETF and ETNs in his customer accounts. The complaint also alleges that Hallas did not conduct adequate due diligence and had no reasonable basis for recommending daily leveraged ETFs and ETNs. Hallas also did not adequately understand the risks involved in purchasing and selling these securities. Finally, the SEC complaint alleges that Hallas misappropriated $170,750 from one of his customers, who lacked investment experience. The case is currently pending.
In May 2014, FINRA suspended Hallas for 30 days and ordered him to pay civil and administrative penalties and fees in the amount of $5,000 and $6,110 in restitution after he was named a respondent in a FINRA complaint. The complaint alleged that Hallas recommended that a customer surrender her fixed annuity and invest the proceeds in the bond fund, without ascertaining whether the she would incur a surrender charge for liquidating the annuity. According to the complaint, “Hallas had no reason to believe that the bond fund would provide greater financial benefit to the customer than the fixed annuity despite knowing that it exposed the customer to greater risk than the fixed annuity.” After the customer switched investments, she incurred surrender and sales charges and suffered tax consequences.
In April 2017, the Securities and Exchange Commission (SEC) charged Hallas with “knowingly or recklessly trading unsuitable investment products in the accounts of five customers and misappropriating more than $170,000 from one of those customers,” according to the SEC complaint. The complaint alleges that Hallas repeatedly traded unsuitable investments in customer accounts, which exposed the unsophisticated customers to significant risk and market volatility. It is alleged that due to the ETF and ETN trades, Hallas generated $128,0000 in commissions and fees, resulting in a net loss of $150,000 across all customer accounts. The SEC sanctioned Hallas to civil and administrative penalties and fines of $260,193.39.
Hallas has also been the subject of two customer complaints, one of which was denied, between 2011 and 2015, according to his CRD report:
October 2015. “Client alleges unethical practices with the exchange of a variable annuity which resulted in a taxable event.” The client sought $14,000 in damages and the case was settled for $12,496.22.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, his former employers may be liable for investment or other losses suffered by Hallas’ customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.