Kieran John Loughran, of New York, New York, a stockbroker registered with Spartan Capital Securities LLC, has been fined $5,000.00 and suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Loughran engaged in excessive trading in a customer’s account. Letter of Acceptance, Waiver, and Consent No. 2018056490314 (August 28, 2024).
FINRA Rule 2111 requires stockbrokers to make sure that any investment they recommend to a customer is suitable for that specific person. To determine if an investment is suitable, stockbrokers are supposed to consider the customer’s financial situation, investment experience, risk tolerance, and other factors that affect their investment profile. Brokers must also avoid recommending too many transactions or trades in a customer’s account, as this can lead to excessive costs for the customer.
According to the AWC, between January 2016 and March 2019, Loughran excessively traded a customer’s account. This customer, who was a farmer and business owner, relied on Loughran’s advice for making investment decisions. Loughran recommended frequent “in-and-out” trading, meaning the customer was buying and selling securities very quickly without significant price changes in the securities themselves. This type of trading generated high commissions and costs, but did not provide meaningful benefits to the customer, FINRA stated.
Loughran carried out 92 trades in the customer’s account, which led to a turnover rate of 10—meaning the portfolio was completely traded over 10 times. He also created a cost-to-equity ratio of 48 percent, meaning the customer’s investments needed to grow by nearly half just to break even due to the costs involved. These activities caused the customer $179,878.00 in total losses, while Loughran’s trading generated $43,495.37 in commissions and other costs.
FINRA stated that Loughran’s trading was excessive and unsuitable for the customer’s financial profile, which included their age, risk tolerance, and investment objectives. Therefore, Loughran violated FINRA Rules 2111 and 2010.
FINRA Public Disclosure shows that Loughran has been identified in four customer initiated investment related disputes containing allegations of Loughran’s conduct while associated with securities broker dealers. On August 23, 2017, a customer filed an investment related complaint involving Loughran’s conduct in which the customer requested $13,000.00 in damages based upon alleged unauthorized trading in equities. The complaint was closed without further action taken by the customer.
On June 22, 2016, a different customer initiated investment related FINRA securities arbitration claim involving Loughran’s conduct was settled for $55,000.00 in damages based upon alleged omissions and misrepresentations of material fact and unsuitable recommendations in over-the-counter equities during the time that Loughran was associated with National Securities Corp. and Newbridge Securities Corp. FINRA Arbitration No. 15-01018.
On February 22, 2022, a customer initiated investment related FINRA securities arbitration claim involving Loughran’s conduct was settled for $45,000.00 in damages based upon alleged unsuitable recommendations and misrepresentations of material fact during the time that Loughran was associated with Spartan Capital Securities LLC. FINRA Arbitration No. 19-03740.
Loughran was associated with Spartan Capital Securities LLC in New York, New York from November 18, 2014, to October 20, 2022.
