WARNING! Impending Investigation–DONALD BARTELT & NEWPORT COAST SECURITIES
Donald Bartelt and Newport Coast Securities
FINRA recently brought a disciplinary action against Newport Coast Securities and seven of its registered representatives, including financial advisors Donald A. Bartelt, Douglas Leone, Marc Arena, Roman T. Luckey, Andre LaBarbera, David M. Levy, and Antonio Costanzo. FINRA alleged that Newport Coast Securities and some of its advisors excessively traded at least 24 customers’ accounts between 2008 and 2013. FINRA also alleged that Newport Coast Securities’ supervisors and compliance department missed a number of supervisory red flags, including: a) 100%-plus cost-to-equity ratios in some clients’ accounts (a cost-to-equity ratio of 10% means that an account must earn at least 10% just to break even from the costs of the trades); b) turnover rates over 100 (a turnover ratio over 4 is presumed to be excessive trading; a turnover ratio over 6 is concluded to be excessive trading); c) highly margined accounts; d) in and out trading; e) high concentrations in one security; f) excessive mark-ups; g) use of inverse and leveraged ETFs for multiple trading sessions; and h) large losses in many customers’ accounts.
Donald Bartelt is a financial advisor in Cave Creek, Arizona. Newport Coast Securities financial advisor Donald Bartelt was one of the advisors alleged to have been involved in the excessive trading. FINRA alleges that Bartelt’s history should have led to heightened supervision by Newport Coast. Despite owing back taxes to the State of Arizona in 2005 and the IRS in 2008, and being delinquent on a multiplicity of credit cards, Newport Coast gave Bartelt a $15,000 hiring bonus when it hired him in May 2010. Bartelt was alleged to have made a number of trades in several companies, including Flotek Industries, Inc. (FTK); Marvell Technology Group Ltd. (MVRL); Jabil Circuit (JBL); and Uranerz Energy Corp. (URZ). Bartelt also filed for bankruptcy in May 2013.
Broker-dealers like Newport Coast Securities have a responsibility to adequately supervise all representatives who are registered through their firms. Securities broker-dealers must follow up on red flags. Broker-dealers also must take steps to ensure that their financial advisors follow all securities rules and regulations, such as the requirement to make suitable investment recommendations and to refrain from excessively trading or churning a customers’ account. When broker-dealers fail to adequately supervise their registered representatives, they may be liable for investment losses sustained by customers. If you have lost money through Donald Bartelt and/or Newport Coast Securities and want to hear about ALL legal options, please visit https://www.israelsneuman.com/ or call us at 720-599-3505.
FREE CASE EVALUATION
DENVER: (720) 599-3505
SEATTLE: (206) 795-5798