Frank Levi Martin (also known as Frangel Levi Martin and Frangel Levi Martinez), of Brooklyn, New York, a stockbroker now registered with LPL Financial, has been suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any supervisory capacity because Martin failed to supervise trading activities and investigate red flags indicating unsuitable or excessive trading. Letter of Acceptance, Waiver, and Consent No. 2018056483904 (October 11, 2023).
According to the AWC, from August of 2016 to July of 2019, Martin served as the branch manager for Arive Capital Markets’ office in Brooklyn, New York. During this period, he intermittently managed the branch in Coram, New York, and supervised a stockbroker in Long Island, New York. His responsibilities included daily suitability reviews of customer accounts and daily trade blotter reviews for the offices he oversaw, as well as for the activities of the Long Island manager.
Martin also had the duty of conducting weekly or monthly reviews of exception reports concerning indicators like turnover, commission velocity, and short-term trading patterns. Despite signs of excessive trading, including high turnover and cost-to-equity ratios in customer accounts, Martin neglected to probe these warning signs of unsuitable or excessive trading. His failure to conduct thorough investigations led to his routine closure of exception reports without ensuring that the trades were appropriate.
For instance, the regulator stated that he disregarded 21 alerts on in-and-out trading for eight customers, all noted on January 31, 2018, by using identical comments for different securities-related alerts. Consequently, Martin’s lack of supervision contributed to excessive trading by six Arive stockbrokers in 12 accounts, resulting in customers incurring $663,463.00 in margin interest, fees, and commissions. The affected accounts showed cost-to-equity ratios ranging between 30 percent and 152 percent, and turnover rates ranging from eight to 45, reflecting excessive trading.
Therefore, Martin violated FINRA Rules 2010 and 3110.
Martin was associated with Arive Capital Markets in Bay Ridge, New York, from October 23, 2015, to August 26, 2019. He has been associated with LPL Financial LLC in Brooklyn, New York, since July 26, 2019.
