SEC Says Brokers|Churned Accounts

WASHINGTON (CN) - Three former brokers at Atlanta-Based JP Turner & Co. churned customer accounts to reap $845,000 in fees from it, while defrauding customers of $2.7 million, the SEC claims in an administrative proceeding.

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The SEC filed a cease and desist order against Ralph Calabro, Jason Konner, and Dimitrios Koutsoubos, claiming they "collectively generated commissions, fees, and margin interest totaling approximately $845,000 while the defrauded customers suffered aggregate losses of approximately $2.7 million."

The three traders work at different firms now, the SEC said. "While at JP Turner, they collectively churned the accounts of seven customers with conservative investment objectives and low or moderate risk tolerances. The churning occurred between January 2008 and December 2009," the SEC said in a statement.

The SEC also charged the men's former supervisor, Michael Bresner, with failing to supervise the traders. Bresner is executive vice president of JP Turner and head of supervision, the SEC said in the statement.

Bresner "is charged with failing to reasonably supervise Konner and Koutsoubos, who generated such high commissions for some of their churned customers that it triggered a requirement in the firm's procedures requiring that Bresner personally review the underlying trading activity. However, Bresner failed to take appropriate action in response to the trading in these accounts despite several red flags," the SEC said.

Turner and its president William Mello agreed to settle charges of compliance failures, according to the SEC.

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