The U.S. Securities and Exchange Commission (“SEC”) announced on September 10, 2012 that is settled with three former Atlanta stockbrokers who were accused of churning client accounts. The SEC has said that the brokers racked up $845,000 in commissions and fees for themselves and their brokerage firm while the clients lost $2.7 million. Churning is one of the more heinous types of stockbroker misconduct because the stockbroker has placed their own financial interests ahead of the client’s.

The brokers worked for JP Turner & Co., a Georgia-based brokerage firm, and were accused of excessively trading seven clients’ accounts from January 2008 through December 2009. The SEC identified the brokers as Ralph Calabro, Jason Konner and Dimitrios Koutsoubos and alleged that the brokers disregarded their clients’ conservative investment objectives and low risk tolerances. According to the SEC, the brokers generated commissions at such a high rate that the clients’ accounts would have had to generate investment returns of 73.3% just for the accounts to break even.

The SEC charged J.P. Turner’s head supervisor Michael Bresner with failing to supervise two of the brokers. The SEC also charged the brokerage firm and its former president, William Mello, both of whom agreed to settle without admitting to or denying the charges.

The brokerage firm will pay about $416,000 in penalties and ill-gotten gains and Mr. Mello will pay a $45,000 penalty, according to the SEC.

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