Overview
On August 11, 2025, FINRA accepted a Letter of Acceptance, Waiver, and Consent (“AWC”) from Mack Leon Miller CRD No. 2822317 related to his alleged recommendations of trades to two senior investors that were not in their best interests. According to the filings, during a routine regulatory examination of Spartan Capital Securities, LLC, FINRA discovered that from approximately October 2019 to April 2022, Miller generated more than $32,230 in commissions from churning his clients’ accounts in violation of the SEC’s Regulation Best Interest (“Reg BI”) and FINRA Rules, causing $71,022 in losses. Without admitting or denying FINRA’s allegations, and as a settlement to FINRA’s inquiry into the transactions, Miller accepted the AWC, which suspended him from associating with any FINRA firm for nine months. In 2020, FINRA previously suspended Miller for five months and ordered him to pay restitution for excessively trading another customer’s account in violation of FINRA rules.
What is Churning?
The situation described above, of frequent, commission-generating trades in an investor’s account, is known as churning. Churning is one of the most common forms of broker misconduct committed against senior and other investors. It violates Reg BI, which provides that financial professionals must act in the “best interest” of investors without placing financial or other interests of brokers, dealers, or natural persons associated with the broker-dealers ahead of investors. In addition, churning violates multiple FINRA Rules.
How to Spot Churning?
To spot churning in your account, look for investment losses in the specific positions you hold. In addition, analyze your monthly financial statements for investment purchases and sales and commission amounts. You can also evaluate your turnover rate, cost-to-equity ratio, and use of in-and-out trading. A turnover rate measures the number of times your securities were exchanged for other securities. A cost-to-equity ratio determines the amount your account must appreciate to cover commissions and expenses. A turnover rate exceeding six, or a cost-to-equity ratio over 20 percent, often indicates churning.
Impacted Investors
If you believe your financial advisor has churned your account in violation of Reg BI and FINRA rules, do not hesitate to contact our office at 800-556-3526 or complete our contact form for a free consultation. We work on a contingency fee basis to try to recover losses. In other words, if we do not obtain a recovery, you do not owe us any legal fees. Act before time runs out on your claim.