Penny Stock Brokers Cheating Investors

| September 29, 2014 | 2 Comments

greedy brokersPenny Stock Broker Scams

Here we go again……

You can’t trust anyone these days… and that goes doubly true if you use a stock broker to trade penny stocks.

Want proof?

All you’’ve got to do is read about Felti & Co. and their recent $1 million fine from FINRA.

Just last week the news came down.  The company was fined $1 million and the majority of their management team was told to hit the bricks……

They got rid of the General Council (their lawyer), the Chief Compliance Officer, the Head Trader and a Branch Manager!  And the firm halted all business.

Why the blow up?

According to the StarTribune, it was because they failed to oversee the broker dealers penny stock business. According to FINRA,

“Feltl solicited its customers to make at least 2,450 purchases of 17 penny stocks in which it made a market and received $2.1 million from the transactions. FINRA said it was unable to gauge the total number of trades because of incomplete records.” 

But it gets worse……

FINRA, the self-regulatory arm of the securities industry, said Feltl failed to comply with customer-suitability, disclosure and record-keeping requirements, didn’’t provide SEC-mandated risk-disclosure documents to customers before trading penny stocks and failed to adequately supervise the business.

In other words,… the brokers there didn’’t tell customers how risky penny stock trading was.  They didn’’t provide investors important information, like disclosures.

And worst of all, they didn’’t follow customer suitability rules…… In other words, they didn’’t care if their investor was a millionaire, or living paycheck to paycheck…… they just sold them high risk investments.

The Truth About Penny Stock Brokers

Here’s the truth about penny stock brokers……

They make money when you buy and sell.

They won’’t care two licks if you make money or lose money.  If you make a million trading a penny stock, they don’’t get paid one penny more.

So from the get go, you’’ve got to realize their entire focus is getting you to move your money.

And that brings me to one of the most important keys to investing…… whether you are investing in penny stocks, regular stocks, or real estate…… this rule applies to everyone.

IT’’S YOUR MONEY AND NOBODY CARES FOR IT MORE THAN YOU WILL!

Think about that.

Actually, let me say it again……

When it comes to investing,… IT’’S YOUR MONEY AND NOBODY CARES FOR IT MORE THAN YOU WILL!

Don’’t forget that and you’’ll be one step ahead.

Profitably Yours,

Penny Stock Research

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Category: Penny Stock Alerts

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Comments (2)

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  1. Doug Cutler says:

    It is good that the scum bags are exposed. I would rather see
    a list of bad brokers rather than a list of good ones. Then we know who to avoid.

    • Brian Kent says:

      Hi Doug,

      Great idea. the problem is to know a bad broker, you have to have some BAD experience with them! And I try to avoid brokers (good, bad or otherwise) at all costs! One think you can do is check out your broker. If you want to see if your broker has any disciplinary problems, it’s easy to do… Use this link to look up your broker and his firm.
      http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/
      It’s a tool provided free of charge by FINRA.org.

      Thanks for reading and your comments!

      BRIAN

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