(720) 599-3505

WARNING! Impending Investigation–PAUL ELVIDGE and CAPE SECURITIES, INC.

SEARCH OUR BLOGS
07
May

WARNING! Impending Investigation–PAUL ELVIDGE and CAPE SECURITIES, INC.

Posted by admin | 0 Comment

Paul Elvidge and Cape Securities, Inc.

Have you lost money with financial advisor Paul Elvidge from Port St. Lucie, Florida?  We are investigating allegations made by FINRA, the Financial Industry Regulatory Authority, against Paul Elvidge, and the brokerage firm that he previously worked with, Cape Securities, Inc.  FINRA alleges that Elvidge stole at least $690,000 by wire-transferring funds from Cape Securities customers’ accounts.  FINRA alleged that Elvidge made at least 21 separate wire transfers involving at least 7 customers’ accounts.

FINRA brought a regulatory action against Cape Securities, Inc. and its Chief Compliance Officer, Michael A. Lovett.  FINRA alleged that Cape Securities and Lovett failed to adequately supervise Elvidge and these wire transfers during 2012.  FINRA further alleged that some of the funds were actually wired into Elvidge’s operating account.  Cape Securities was also alleged to have failed to supervise accounts that were actively traded between October 2011 to February 2013.  Some of the accounts had turnover ratios ranging between 7 to 19, with cost-equity ratios of 11% to 63%.

One of the most common ways to determine whether the account was excessively traded or churned is to determine the annual turnover ratio.  This ratio shows how often the securities in the account are bought or sold within a year.  Authority has held that an annual turnover of 4 or more is a “presumption” of churning, and an annual turnover of 6 or more is a “conclusion” of churning.  Thus, if the accounts had turnovers of 7 to 19, then there would be a conclusion that there was churning or excessive trading.

Another way to determine whether there was excessive trading is the cost equity ratio.  This ratio takes the commissions generated by the trading, divided by the average value of the account.  This ratio essentially determines the returns that an account needs to make just to break even. Thus, an account with a cost-equity ratio of 63% would need to earn 63% just to break even from all the costs of trading.

To settle these allegations, Lovett was suspended for six months and paid a $5,000 fine.  Cape Securities was fined $125,000.

Paul Elvidge was a financial advisor and registered representative of Cape Securities from August 2011 to October 2012.  He worked at a branch office in Port St. Lucie, Florida.

Brokerage firms like Cape Securities have a responsibility to adequately supervise all representatives who are registered through their firm.  Brokerage firms also must take steps to ensure that their financial advisors follow all securities rules and regulations, as well as internal firm policies.  When brokerage firms fail to adequately supervise their registered representatives, they may be liable for investment losses sustained by customers.

Our attorneys have represented over one thousand investors who have been defrauded by their financial advisor or stockbroker.  While we have offices in Denver and the Seattle area, attorney David Neuman is licensed to practice law in Florida and has previously represented investors throughout Florida.  If you have lost money with Paul Elvidge and Cape Securities and want to hear about ALL legal options, please visit https://www.israelsneuman.com and go to our CONTACT page or call us at 720-599-3505.

Click to view:  Elvidge BrokerCheck 5.6.15

Click to view:  Cape FINRA AWC

Click to view:  Lovett FINRA AWC

Israels & Neuman, PLC is a private law firm and is not affiliated with any government or law enforcement agency. Any investigation referenced in this blog is independent in nature and is being conducted by our law firm privately, not in conjunction with any government or law enforcement agency. All information contained in this blog should be deemed statements of opinion derived from the author’s review of public records, not statements of fact. This blog is advertising material and does not create an attorney client relationship, nor does it constitute legal advice. Everyone’s situation is different and the question of whether or not you have a claim will vary on a case-by-case basis. In contingent representation, clients may still be liable for costs.
10.0David P Neuman

FREE CASE EVALUATION

DENVER: (720) 599-3505

SEATTLE: (206) 795-5798


Copyright © 2019 Israels Neuman, PLC. All Rights Reserved | Sitemap

Marketing Webmasters | Developed By TRIGUNS