Suspension for Mack Leon Miller Due to Excessive Trading and Churning

The Financial Industry Regulatory Authority (FINRA) sanctioned Mack Leon Miller (CRD No. 2822317) for excessively trading the accounts of two retail customers between October 2019 and April 2022. FINRA found that Miller’s trading activity was unsuitable and not in his clients’ best interests, resulting in significant losses for both investors. According to the settlement, Miller willfully violated Regulation Best Interest (Reg BI) under Rule 15l-1(a)(1) of the Securities Exchange Act of 1934, and FINRA Rules 2111 and 2010. He consented to a nine-month suspension in all capacities. No monetary fine was imposed because he demonstrated an inability to pay.

Miller entered the securities industry in 1996 and has been registered since April 2017 as a General Securities Representative with Spartan Capital Securities, LLC (CRD No. 146251). He previously entered into a 2020 FINRA settlement for excessive trading in another client account, for which he served a five-month suspension and paid partial restitution.

Under Regulation Best Interest, brokers must act in the best interest of retail clients and ensure that a series of recommended transactions is not excessive given the customer’s investment profile. Common indicators of excessive trading include a turnover rate of six or more or a cost-to-equity ratio exceeding 20%, meaning the account must grow more than 20% annually just to break even. FINRA Rule 2111 similarly prohibits unsuitable recommendations, while Rule 2010 requires brokers to maintain high standards of commercial honor.

FINRA found that Miller’s trading in two senior customers’ accounts far exceeded these limits. For one customer—a 66-year-old farmer—Miller recommended 20 trades resulting in a 30% annualized cost-to-equity ratio, producing $6,905 in commissions and $13,542 in realized losses. For another 66-year-old small business owner, Miller recommended 31 trades with a 24% annualized cost-to-equity ratio, generating $25,325 in commissions and $57,480 in losses. FINRA determined that these transactions were excessive, unsuitable, and inconsistent with the clients’ investment needs, in violation of Reg BI and FINRA’s ethical standards.

Lufrano Law, LLC is a national investment litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. Please contact us at (800) 627-2179 for more information if you have been the victim of investment negligence or fraud.

The content on this site reflects personal opinions and does not constitute statements of fact. No findings have been made against the firms or individuals mentioned. This blog is intended solely for educational purposes, drawing on publicly available information to provide general insights and a basic understanding of the law. It is not a substitute for legal advice.