Barry T. Eisenberg, of New York, New York, a stockbroker registered with Alexander Capital, L.P., has been named in a Complaint initiated by The Office of Montana State Auditor, Commissioner of Securities and Insurance, which alleged that Eisenberg failed to supervise the sales practices of two registered registered representatives, Joseph Connolly and William Gennity, who churned a customer’s account and made unsuitable investment recommendations. In the Matter of Barry Eisenberg, CSI Case Number: SEC-2016-106 (Aug. 2, 2016).
Particularly, the Complaint stated that Eisenberg, a securities salesperson and branch manager supervisor for Alexander Capital, L.P., was responsible for supervising Joseph Connelly and William Gennity from January of 2014 through August of 2014. Apparently, Connolly and Gennity, during this time frame, charged customers with excessive fees, failed to follow customer’s instructions regarding margin trading, effected trades in a discretionary manner without requisite authorization, made unsuitable investment recommendations to customers, and effected unauthorized trades in customer accounts.
The Complaint stated that between April 8, 2013, and August 6, 2014, Gennity and Connolly effected purchases and sales of forty securities in the account of customer Charles Gravely. Gravely apparently suffered investment losses exceeding $200,000.00 in connection with two-hundred and thirteen trades which were effected in his account. The Complaint stated that Gravely was charged $289,944.75 in commissions. Apparently, Gravely’s account suffered from a turnover rate of over fifty-seven, which led Montana’s State Auditor to claim that Connolly and Gennity churned the customer’s account.
Following this point, in February of 2014, Gravely opened another account with Alexander Capital in the name of Tri-G Corporation, in which a total of $50,925.00 was invested. The Complaint reported that twelve trades in securities were effected through Connolly and Gennity in this Tri-G Corporation account from April of 2014 through August of 2014. Subsequent to the purchases and sales of three securities, Tri-G seemingly realized losses of $45,000.00. Yet, Connolly and Gennity apparently charged Tri-G Corporation with an estimated $4,265.94 in commissions associated with the trades effected in the Corporation’s account. The Complaint stated that the high turnover rates associated with this account constituted evidence that Connolly and Gennity engaged in churning.
The Complaint stated that Gennity and Connolly traded actively in the customer’s margin account, despite lacking the requisite authorization from the customer. Additionally, the Complaint indicated that the confirmations provided to Tri-G Corporation and Gravely did not accurately reflect the true compensation that was provided to the firm and registered representatives in connection with the trades. Particularly, with regard to the two-hundred and thirteen trades placed in Gravely’s account, he was charged commissions of $10,437.00 which were disclosed via trade confirmations; however, Gravely was also charged $279,507.75 via undisclosed mark-ups and mark-downs.
According to the Complaint, Eisenberg was alleged to have failed to follow the firm’s procedures concerning the appropriate amount of commissions to be charged, practices associated with margin trading, churning of customer accounts, suitability, the accuracy and maintenance of customer documentation, and proper supervisory review.
Montana’s Commissioner of Securities and Insurance alleged that Eisenberg ultimately failed to make sure that Connolly and Gennity abided by the firm’s policies and complied with the Securities Act of Montana, Mont. Code Ann. Section 30-10-201. The Commissioner of Securities and Insurance, according to the Complaint, is seeking that Eisenberg be fined and ordered to pay restitution, and for Eisenberg’s securities registration in Montana to be revoked.
FINRA Public Disclosure reveals that Eisenberg previously settled a customer initiated investment related arbitration action on June 27, 2011, for $635,000.00 in damages based upon allegations that Eisenberg, while working for former employer, J.P. Turner & Company LLC, failed to supervise a registered representative.
Since 1993, Eisenberg has been associated with seven different broker dealers, one of which has been expelled by securities regulators for violation of federal securities laws or is otherwise defunct.
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
