Former Vanderbilt Securities broker Mark Kaplan (no relation to any DKR lawyers) has been barred by FINRA for churning the account of an elderly client. Kaplan executed 3,500 trades in a four-year-period, resulting in investment losses totaling $723,000.
According to a settlement, made public by FINRA, Kaplan was accused of churning and engaging in excessive trading in the account of a 93-year-old retired clothing salesman who suffered from dementia.
Between 2011 and 2015, Kaplan controlled the account through Vanderbilt Securities. Over the four-year-time period, Kaplan made thousands of trades that created $723,000 in trading losses and generated $735,000 in commissions and markups for himself and Vanderbilt.
FINRA says that Kaplan never discussed the extent of the losses with his client or the aggregate amount that was paid in sales charges and commissions.
According to the report, in March 2011 the client had $508,000 in his investment account and relied on Social Security payments as his source of income. In April 2015, the court granted an application by the elderly client's nephew to act as his legal guardian and manage his financial affairs.
Kaplan Had History of Customer Complaints
According to Kaplan’s BrokerCheck report, he started working at Vanderbilt Securities in March 2011 and gained control of this client’s account at around the same time. Prior to Vanderbilt, Kaplan was fired from Morgan Stanley "as a result of a client complaint and other concerns regarding activity in client accounts."
The report also showed that Kaplan’s career in the securities industry spanned 29 years and included seven other customer disputes that resulted in firms paying settlements to clients ranging from $11,500 to $500,000.
As part of the FINRA settlement, Kaplan agreed to be barred from the securities industry. He resigned from Vanderbilt in March of this year. The firm, based in Woodbury, New York, has not yet commented on the case.
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