Timothy John Stack of New York New York a former chief compliance officer registered with Alexander Capital LP is the subject of a Second Amended Notice of Proposed Agency Action and Opportunity for Hearing issued by the Office of the Montana State Auditor Commissioner of Securities and Insurance in which sanctions have been sought against Stack founded on accusations that he failed to supervise fraudulent activities of Alexander Capital stockbrokers.
According to the Notice, a Montana customer, Charles Gravely, established an account with Alexander Capital LP on April 8, 2013, funding it with $318,697.00. Apparently, between April 8, 2013 and August 6, 2014, two hundred thirteen trades had been executed by the firm’s registered representatives, Connolly and Gennity. The customer had apparently been charged $289,944.75 in commissions on those transactions. The Commissioner of Securities and Insurance contended that the customer’s turnover rate was over fifty seven, which evidenced that the customer’s account had been churned.
The customer also reportedly established a business account with Alexander Capital in February of 2014, funding it with $113,925.31. Between April of 2014 and August of 2014, twelve trades had apparently been effected within the customer’s account; however, the customer sustained a $45,113.00 net loss. The customer’s account was reportedly closed on November 2014. The Commissioner of Securities and Insurance also contended that the customer’s business account was churned.
Ultimately, the Commissioner of Securities and Insurance alleged that Stack, among others, failed to supervise registered representatives to ensure that transactions were in compliance with the Securities Act of Montana; conduct violative of Mont. Code Ann. §30-10-201. Moreover, the Commissioner of Securities and Insurance stated that Stack neglected to report the alleged fraudulent activities to the Commissioner; conduct violative of Mont. Code Ann. § 30-10-310. Further, Stack was alleged to have failed to cooperate with a heightened supervision arrangement for a registered representative who placed faulty trades in a customer’s account; conduct violative of Mont. Code Ann. Section 30-10-201(13)(i).
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that two customers collectively filed an investment related arbitration claim involving Stack’s conduct in which the customers requested a total of $190,148.00 in damages supported by allegations that Stack failed to supervise activities in the customers’ accounts. FINRA Arbitration No. 17-03364 (Dec. 18, 2017). Stack is additionally subject of a customer initiated investment related arbitration claim in which three customers collectively requested $686,079.00 in damages based upon accusations that Stack failed to supervise stock and over-the-counter equities transactions placed in their accounts. FINRA Arbitration No. 18-00302 (Jan. 26, 2018).
Stack’s registration with Alexander Capital has been terminated as of February 6, 2018. In his career, he has been associated with five different broker dealers which have been expelled by securities regulators for violation of federal securities laws or are otherwise defunct. #cockroach
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