SEC wins churning case against 'cockroaching' broker

SEC wins churning case against 'cockroaching' broker
Barred broker worked at 10 different firms in his 13-year career
MAR 05, 2019

The Securities and Exchange Commission obtained a final judgment against a broker charged with excessive churning of client brokerage accounts. William Gennity, who has been suspended from the industry by the Financial Industry Regulatory Authority Inc., was ordered to pay $302,483, which includes $127,686 in disgorgement, $14,797 in prejudgment interest and a civil penalty of $160,000. Mr. Gennity, who worked at 10 different brokerage firms during his 13-year career, most recently worked at First Standard Financial Company in Staten Island, N.Y., from 2014 through 2018. According to the SEC complaint filed in the U.S. District Court of the Southern District of New York, between July 2012 and August 2014 Mr. Gennity "recommended to four customers a pattern of high-cost, in-and-out trading without any reasonable basis to believe that his customers could make a profit." (More:Cetera fined $1.4 million for award-winning broker's excessive trades) Mr. Gennity's recommendations resulted in losses for the customers and gains for Mr. Gennity, according to the SEC. According to Finra's BrokerCheck, Mr. Gennity was employed at New York-based Alexander Capital when he was churning the client accounts. "This is indicative of a bigger problem in the industry because it shows that firms are not properly supervising to look for churning activity," said Adam Gana, an attorney at Gana Weinstein, who was not involved in this case. "Churning is one of the worst activities a broker can conduct," he added. "And one of the red flags should have been the way this broker was moving from firm to firm, which the industry calls cockroaching."

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.