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SEC Accuses Brokers of Churning Accounts

ATLANTA (CN) - Three former brokers in Atlanta cost customers $2.7 million by churning their accounts, and made $845,000 from it, the SEC said Wednesday.

JP Turner & Co. and its president William Mello agreed to settle with the SEC.

Administrative proceedings will continue against brokers Ralph Calabro, Jason Konner and Dimitrios Koutsoubos, and the firm's head supervisor, Michael Bresner, the SEC said.

Bresner is not accused of profiting from churning, but of failing to supervise the brokers.

The brokers are accused of churning customers' accounts to get $845,000 in commissions, fees and margin interest, "while the defrauded customers suffered aggregate losses of approximately $2.7 million," the SEC said in a statement.

The churning allegedly occurred about 5 years ago. The three brokers work at different firms now in the Northeast, the SEC said.

Bresner is still head of supervision and an executive vice president at JP Turner in Atlanta. He is charged with failing to supervise the brokers and "fail(ing) to take appropriate action in response to the trading in these accounts despite several red flags," the SEC said in a statement.

JP Turner settled by agreeing to disgorge $200,000, plus $16,050 in interest, and pay a $200,00o fine.

Mello will be fined $45,000 and cannot work as a supervisor with a broker, dealer or investment adviser for all of 5 months.

As is customary with the SEC, the settling parties did not have to admit that they did anything wrong.

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