Peter Huffman (CRD#: 5613027), a registered representative with Merrill Lynch, Pierce, Fenner & Smith Incorporated in La Jolla, California, is currently involved in a pending dispute in which a client is alleging he engaged in excessive trading to generate extra commissions (known as “churning”). The client is requesting $2,797,295 in damages, according to Peter Huffman’s BrokerCheck report accessed on August 16, 2019. The customer is alleging that the churning took place from January 31, 2012 to May 31, 2019.
The investment product involved in this dispute is municipal debt. Also known as a municipal bond, municipal debt is a debt security issued by a municipality. It is exempt from most taxes, which makes them attractive to high net-worth investors.
Churning is a violation of U.S. securities rules. Churning occurs when a broker trades securities in a client’s account more often than necessary to generate excessive commissions. How can you avoid churning? Consider choosing a brokerage account that allows you to compensate your broker with a percentage (say 1%) of the portfolio value. That way, when you make money, your broker makes money too. This could lead to another problem, however: “reverse churning,” when a broker overseeing a fee-based account charges a management fee but then doesn’t do enough trading in the account to warrant such a fee. For this reason, it’s important to stay informed about activity in your investment accounts and bring any concerns to FINRA or an experienced securities attorney.
A ten-year veteran of the securities industry, Pete Huffman has spent his whole career at Merrill Lynch, Pierce, Fenner & Smith Incorporated. He started there on January 19, 2009.
If Peter Huffman is your broker or if you have questions about churning, don’t hesitate to contact the experienced securities attorneys of Fitapelli Kurta. Call (877) 238-4175 or email email@example.com for your free consultation.