Stephen Sloane, of New York, New York, a stockbroker formerly registered with WestPark Capital Inc., is identified in a customer initiated investment related FINRA securities arbitration claim in which the customer requested compensatory damages supported by accusations that Sloane provided unsuitable investment recommendations regarding government debt investments when he was employed by WestPark Capital. Financial Industry Regulatory Authority (FINRA) Arbitration No. 21-01572. According to the claim, Sloane engaged in churning of treasuries in the customer’s account, resulting in damages.
Sloane has been identified in four more customer initiated investment related disputes containing allegations of his wrongdoing while registered with Citigroup Global Markets Inc., Salomon Smith Barney Inc., and Morgan Stanley. FINRA Public Disclosure shows that a customer initiated investment related FINRA securities arbitration claim concerning Sloane’s conduct was settled to resolve accusations of unsuitable stock trading by Sloane at Morgan Stanley Dean Witter.
Sloane is also referenced in a customer initiated investment related FINRA securities arbitration claim which was resolved for $25,000.00 in damages based upon allegations of Sloane placing the customer in unsuitable investments, including mutual funds and stocks, while he was associated with Salomon Smith Barney.
Another customer initiated investment related FINRA securities arbitration claim involving Sloane’s activities was resolved for $55,000.00 in damages founded on accusations of breach of contract and violation of securities laws relating to Sloane’s mutual fund transactions in the customer’s Salomon Smith Barney account. According to the claim, Sloane made misrepresentations to the customer regarding mutual fund transactions. The claim also alleges negligence and unsuitable advice by Sloane.
Sloane is the subject of a different customer initiated investment related FINRA securities arbitration claim which was settled for $78,500.00 in damages supported by allegations of poor investment recommendations by Sloane concerning exchange-traded funds when he was registered with Citigroup Global Markets.
FINRA Public Disclosure additionally shows that Sloane has been barred from associating with any FINRA member in any capacity according to an Office of Hearing Officers Default Decision containing findings of Sloane’s unsuitable investment recommendations to customers. Department of Enforcement v. Stephen Sloane, Disciplinary Proceeding No. 2016049414401 (December 8, 2020).
According to the Decision, fourteen customers were advised by Sloane on an unsuitable strategy which consisted of short-term trades of treasuries. The regulator states that customers were told to purchase ten-year and thirty-year treasuries in the secondary market. Sloane would then tell customers to sell those positions after determining that a market event occurred and to purchase new treasuries with the proceeds. The regulator states that eighty percent of the treasuries sales took place in less than one year from purchases.
Sloane was scrutinized by Morgan Stanley, given his trading activities. This did not stop Sloane from continuing to make active trades in customer accounts. The regulator notes that Sloane caused customers to suffer $88,400.00 in losses during the last two years of his employment with Morgan Stanley. Twelve customers followed Sloane to WestPark Capital when he became a stockbroker in 2016. The Decision states that between March of 2016 and January of 2018, 214 transactions in treasuries were made by Sloane in those customers’ accounts. After imposing service fees, markdowns, and markups, customers collectively lost $241,411.00.
The regulator found that Sloane violated FINRA Rules 2010 and 2111(a) for failing to have an adequate reason to believe that his recommendations were suitable. FINRA states that Sloane lacked knowledge of the risks relating to his strategy, including the effect of costs on his trading. The regulator also found that Sloane charged excessive markups to customers.
Sloane was registered with WestPark Capital between March 10, 2016, and August 21, 2020.
