Stockbroker Made Risky Trades and Paid Personal Bills
A New York-based broker has been charged with using client funds to make very risky and highly volatile trades without their knowledge and using clients’ money to pay his credit card bills and other personal expenses.
SEC Claims Stockbroker Made Unsuitable Investments
According to the Securities & Exchange Commission (SEC), Demitrios Hallas used client money to make trades that were not suitable to their risk tolerance and portfolio. Hallas lost more than $150,000 this way. According to the SEC, Hallas also allegedly stole more than $170,000 from a single client over a period of two years.
From 2001 through 2015, Hallas was registered at 11 different brokerage firms, including Santander Securities LLC and Forefront Capital Markets. Between September 2014 and October 2015, he is alleged to have bought and sold 179 daily leveraged exchange-traded notes (ETNs) and exchange-traded funds (ETFs) with savings entrusted to him by five different clients – four of whom he began representing while at Santander. Because of the complexity and inherent risk of leveraged ETFs and ETNs many brokerage firm strictly prohibit brokers from selling these investment products to retail investors.
SEC Claims Hallas was Reckless
According to the complaint, Hallas either knew or was reckless in not knowing, that he had no reasonable basis to make such trades, and should have known that these trades were not consistent with his clients’ needs and risk tolerance.
For clients with little to no investing experience, trading ETNs and ETFs can be particularly risky. Knowing that Hallas would meet clients in neutral venues and have his clients sign account forms that contained inflated or inaccurate information regarding their income, net worth, and risk tolerance.
Further, the SEC claimed that Hallas himself lacked the understanding necessary to trade leveraged ETFs and ETNs. As such, Hallas would not have been able to properly explain the nature and risks of leveraged ETFs and ETNs to his clients. In one instance, he lost one client $61,492 in a single day.
In addition to his risky trading, Hallas is accused of pocketing more than $100,000 from a client while he was working at Chase Investment Services Corporation.
Stockbroker Faced Prior Claims
Hallas also was investigated in 2014, ultimately settling with FINRA after he recommended that two clients liquidate their securities and invest in mutual funds. He was suspended for 30 days and ordered to pay restitution exceeding $11,000.
Are you a Victim of Securities Fraud?
Unfortunately, some brokers may act in an unscrupulous fashion, preying on inexperienced investors. And some brokers may not even understand the investment products that they recommend and sell to their clients. If you feel that you have been victimized by a negligent stockbroker or by investment fraud, you should consult an experienced securities attorney to make sure that your broker is acting with your best interests in mind.
Call a Securities Attorney Today
Contact an attorney at The Fraud Report’s partner law firm, Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options. DKR’s lawyers have helped investors recover leveraged ETF investment losses from some of the largest brokerage firms on Wall Street.
With offices in Los Angeles, our securities lawyers throughout Santa Monica, Beverly Hills, and Hollywood they assist you with any securities issues that you may be facing.