The Financial Industry Regulatory Authority (“FINRA”) has suspended financial advisor Carl Antaki from the securities industry for three months. Mr. Antaki consented to the suspension after FINRA alleged that he excessively and unsuitably traded a customer’s account. FINRA also fined Mr. Antaki $5,000 and ordered him to pay $22,865 in restitution to the customer.
The alleged conduct occurred while First Standard Financial Company LLC employed Mr. Antaki in Melville, New York. Since September 2019, Mr. Antaki has been registered with Network 1 Financial Securities Inc. in Syosset, New York.
As discussed more fully below, Mr. Frey has a long history of customer complaints, associations with disreputable firms, and at least one employment termination.
If you have suffered financial losses investing with Carl Antaki, First Standard Financial Company LLC, or Network 1 Financial Securities Inc., or suspect that Mr. Antaki did not have your best interest in mind when recommending investments or making account transactions, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your legal rights.
Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as First Standard Financial Company LLC and Network 1 Financial Securities Inc.
FINRA Letter of Acceptance, Waiver, and Consent No. 2019063601401
FINRA and Mr. Antaki entered into a Letter of Acceptance, Waiver, and Consent No. 2019063601401 on May 20, 2021, after FINRA alleged that during the period August 2017, through June 2019, while associated with First Standard Financial Company LLC, Mr. Antaki excessively and unsuitably traded a customer’s account. Specifically, FINRA alleged:
- Antaki engaged in quantitatively unsuitable trading in a customer’s account.
- The customer was a 52-year-old executive at a manufacturing company who relied on Mr. Antaki’s advice and accepted his recommendations.
- Between August 2017 and June 2019, Mr. Antaki recommended that the customer place frequent trades in his account.
- Although the account had average monthly equity of approximately $55,000, Mr. Antaki recommended and executed trades in the customer’s account with a total principal value of more than $1 million over the relevant period, resulting in an annualized turnover rate of more than eight.
- Collectively, the trades that Mr. Antaki recommended caused the customer to pay $22,865 in commissions and other trading costs, which resulted in an annualized cost-to-equity ratio of more than 30 percent—meaning that the customer’s account would have had to grow by more than 30 percent annually just to break even.
- Antaki’s recommended securities transactions in the customer’s account were excessive and unsuitable given the customer’s investment profile.
- Accordingly, Mr. Antaki violated FINRA Rules 2111 and 2010.
Excessive trading occurs when a financial advisor makes many trades in a customer’s account, not to benefit the customer but to generate commissions for the broker.
There are two primary indicators used to evaluate whether a financial advisor excessively traded an account. The first is turnover rate, which represents the number of times a portfolio of investments is replaced for another portfolio of investments. Generally, a turnover rate of six suggests excessive trading, but a turnover rate below four can be excessive in some cases. The accounts at issue had a turnover rate of eight.
The second indicator used to assess whether trading is excessive in an investment account is its cost-to-equity ratio. The cost-to-equity ratio measures the amount an account must appreciate to cover commissions and other expenses. That is, how much the account needs to grow just to break even. A cost-to-equity ratio of 20% generally indicates excessive trading has occurred. The accounts at issue had cost-to-equity ratios of 30%.
Excessive trading is an unethical and illegal practice. It is also a violation of securities rules and regulations and can cause enormous harm to customers.
Financial Advisor Carl George Antaki (CRD No. 4177543)
Carl George Antaki, who has 21 years of experience in the securities industry, has a long history of customer complaints, associates with disreputable brokerage firms, and at least one employment termination.
Mr. Antaki has been associated with seven different brokerage firms throughout his career, including two firms that FINRA has expelled. On at least one occasion, his employment was terminated after allegations of misconduct. Mr. Antaki has been associated with the following firms:
- Network 1 Financial Securities, Inc. in Syosset, New York, from September 2019 to the present.
- First Standard Financial Company LLC in Melville, New York, from November 2015 to September 2019.
- Rockwell Global Capital LLC in Melville, New York, from April 2008 to November 2015.
- Empire Financial Group, Inc. (expelled by FINRA) in Uniondale, New York, from November 2005 to April 2008.
- Ehrenkrantz King Nussbaum, Inc. (expelled by FINRA) in Melville, New York, from December 2001 to November 2005.
- Ehrenkrantz King Nussbaum in New York, New York, from October 2001 to December 2001.
- Weatherly Securities Corporation in New York, New York, from May 2000 to October 2001.
In 2008, Mr. Antaki’s employment was discharged by Empire Financial Group. In connection with the employment termination, Empire Financial Group alleged that Mr. Antaki failed to follow a customer’s instructions to place a stop loss.
Throughout his career, Mr. Antaki has also been the subject of at least six customer disputes:
- Customer Dispute (January 2021): A customer filed a securities arbitration complaint alleging $278,633 in damages due to unauthorized trading, unauthorized use of margin, breach of fiduciary duty, and breach of contract. The dispute is pending.
- Customer Dispute (October 2017): A customer filed a securities arbitration complaint alleging $82,699 in damages as a result of fraud, misrepresentation, churning, and commission abuses. Antaki settled the matter for $8,750.
- Customer Dispute (June 2017): A customer filed a securities arbitration complaint alleging $25,068 in damages due to excessive trading and unsuitable investment recommendations. Antaki denied wrongdoing, and an arbitration panel dismissed the claim.
- Customer Dispute (September 2015): A customer filed a securities arbitration complaint alleging $300,000 in damages as a result of excessive commissions, unsuitable investment recommendations, and use of margin. Antaki settled the matter for $62,500.
- Customer Dispute (March 2008): A customer filed a written complaint with Empire Financial Group, Inc. alleging that Mr. Antaki failed to follow instructions to place a stop-loss order on a position in the customer’s account, as well as a failure to disclose all material details of the transaction. Although the firm terminated Mr. Antaki, it offered no compensation to the customer, and the matter was closed.
- Customer Dispute (November 2001): A customer filed a securities arbitration complaint alleging $200,000. The complaint alleged that Mr. Antaki failed to follow instructions, placed unauthorized trades, breached his fiduciary, and acted negligently. The case proceeded to an arbitration hearing, where the arbitration panel found in favor of the customer. The customer was awarded $20,000.
First Standard Financial Company LLC and Network 1 Financial Securities Inc.– A Duty to Supervise
Financial institutions like First Standard Financial Company LLC and Network 1 Financial Securities Inc. must properly supervise financial advisors and customer accounts. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as excessive trading, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.
How to Recover Financial Losses or Obtain a Free Consultation
If you have suffered investment losses with Carl Antaki, First Standard Financial Company LLC, or Network 1 Financial Securities Inc., contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (855) 430-4010 for a free and confidential review of your legal rights.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.