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New Meaning To Churn & Burn!

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May 2, 2006 12:15 am

Snippet of an article concerning a lawsuit against GunnAllen:<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


According to court papers, Mr. Yates opened the account in February 2004 with cash and securities totaling $428,000. By May of that year, his losses included commissions of $128,840 and trading losses of $240,381, according to a joint pretrial statement.

... a federal court jury in <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />San Francisco awarded Mr. Yates $240,382 in compensatory damages and $1.44 million in punitive damages. The judgment also awarded $120,191 in punitive damages against Mr. Williams, who left GunnAllen in March and is now affiliated with R.M. Stark & Co. Inc. of Delray Beach, Fla.

WOW! In only 3-4 months, the broker (Mr. Williams) generated $128,840 in commissions off less than half a million in assets! At least, they left the client $60,000 of his original investment. 

GunnAllen sales pitch to rookies:

ML requires $15MM in assets in 2 years, SB requires $12MM, MS requires $4MM. But we, at GunnAllen, guarantee you the good life with only $500K in assets. That's right, just a cool half mill. So, while the other brokers are sweating to make their asset goals, you're busy writing tickets and making your dreams come true. So, what's it going to be? Oh, and by the way, we don't take "NO" for an answer.

May 2, 2006 2:30 pm

Holy Cow!!  I can't begin to imagine what would generate such commissions in such a short period of time!

Even Dirk couldn't sell that many EIAs

May 2, 2006 3:43 pm

thank you doberman for the info. I actually was following this story. I knew Mr. Yates had filed a lawsuit againg Williams and GunnAllen but i could not find out what happened next. actually if you look at Mr. Williams work history you would see that he - along with most of the other brokers at that GunnAllen Financial Branch who are making 20% and more in commissions - were formerly working for another B/D " Continental Broker dealer" which was expelled from the security industry for ripping off their clients of 5.3 million dollars. Most of Continental brokers ended up opening branches of Gunnallen financial. most of those brokers have few marks on their U4 as you can see if you go to broker Check on the NASD website. if you have any more info related to this firm or its brokers please post it.

May 3, 2006 12:09 am

The snippets. from the article I posted, are from a competitor publication to these boards. Sometimes, links to these articles have been pulled by the moderator. For that reason, I didn't post the link.

Also, I made an error in my posting. The GunnAllen sales pitch to the rookie alluded to an incorrect fact that the rookie need only to annually raise about $500,000 in assets to make a good income. Actually, it should have read, at least $500,000 every 3 allow for "asset depletion" due to excessive commissions and trading losses.