James Schwartz: FINRA Bars Former NYC Broker; Churning Allegations

A disciplinary action taken by the Financial Industry Regulatory Authority against former New York, New York broker James Schwartz (CRD# 3043085) barred him over allegations he churned and excessively traded customer accounts. A former representative of Joseph Gunnar & Company and First Standard Financial Company, Schwartz was indefinitely barred from acting as a broker or otherwise associating with a broker-dealer firm as a result of these findings.

According to an order accepting an offer of settlement (No. 2016051704302) dated April 2019, James Schwartz was named in a FINRA complaint alleging he churned and excessively traded customer accounts. FINRA’s complaint alleged that his trading activities were unsuitable, and that they resulted in combined losses exceeding $660,000 in the accounts of the customers in question, while creating “gross sales credits and commissions of approximately $277,705, of which he received more than $194,000.” FINRA’s complaint alleged that Schwartz engaged in “fraudulent and deceptive trading” and executed unauthorized trades. More specifically, according to FINRA, Schwartz allegedly effected transactions “with a total principal value of $10 million without his customers’ authorization.” FINRA’s complaint also states that one account in which he conducted unauthorized trades was the account of a deceased customer. In connection with this complaint, James Schwartz has been barred from acting as a broker or otherwise associating with a broker-dealer firm.

In addition to this action, James Schwartz’s disclosure records list seven customer complaints detailing allegations of various misconduct.

A 2017 complaint, for instance, alleges that while a representative of Paulson Investment Company, James Schwartz recommended unsuitable investments, engaged in unauthorized trading, was negligent in carrying out his duties, violated federal securities law and Georgia blue sky law, effected excessive trades, and breached his fiduciary duty to act in his customers’ best interests. This complaint reached a settlement in 2018 of $800,000. A 2016 complaint, alleging Schwartz recommended unsuitable investments and mishandled their accounts, reached a settlement of $782,000.

James Schwartz is not currently registered as a broker. His employment history includes Joseph Gunnar & Company, First Standard Financial Company, Aegis Capital, Rockwell Global Capital, John Thomas Financial, Paulson Investment Company, Gunnallen Financial, Maxim Group, Investec Ernst & Company, First Montauk Securities, Salomon Grey Financial Corporation, and First American Equities. He currently holds no state registrations and has passed three securities industry qualification examinations.