The SEC has announced that a jury has returned a verdict against a broker who was charged with fraud for excessively trading customer accounts using a trading scheme to obtain substantial commissions for the broker and big losses for the client. A second broker was charged in the same complaint. The second broker admitted to misconduct and settled with the SEC on the eve of the trial.
Trial evidence showed that Donald J. Fowler was registered with J.D. Nicholas & Associates Inc. in Syosset, New York. Fowler engaged in fraud by carrying out an in-and-out trading scheme that resulted in customers losing substantial amounts. However, the scheme generated large commissions for Fowler. Evidence showed that Fowler didn’t do any reasonable due diligence to determine whether or not his trading practices would be profitable for clients.
The court is set to determine remedies against Fowler at a later date. Further details can be found here.