Shammami v. Allos et al

Filing 1

COMPLAINT filed by Mouayad Shammami against Alfred M. Allos, Broad Street Securities Inc., Stuart Burchard with Jury Demand. Plaintiff requests summons issued. Receipt No: 0645-2969573 - Fee: $ 350. County of 1st Plaintiff: Wayne - County Where Action Arose: Wayne - County of 1st Defendant: Oakland. [Previously dismissed case: USDC-EDMI, 2:07-cv-14214, Judge Duggan, Patrick J] [Possible companion case(s): None] (Attachments: # 1 Index of Exhibits, # 2 Exhibit, # 3 Exhibit, # 4 Exhibit, # 5 Exhibit, # 6 Exhibit, # 7 Exhibit) (Sullivan, Donald)

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Feb 25 2 0 1 1 1 1 : 1?FII',1 HP LRSERJET o FHX p.2 F'INANCIAL INIDUS TRY REGULATORY AUTHOR]TY ARBITRATION PR.OCEEDING FINRA CASENO.:08-0 10 t5 Defendants. DONALD D. SULLIVAN (PM'J Attorneyfor Claimant P.O.Box 308 NewHudson, MI4g165 (248) 49t-6777 Fax:(248) 491-7485 Email: Dsulli I STUART BURCI{ARD, In pro per 2030VallejoStreet, #1001 Szur Francisco, g4IZj CA (41s) 82r-3es2 Fax:(4I5) 524-4218 ,="ott."tTflESSETH, 1' 2' 3' 4' the following statementsare true and corroct to rhe besr ofmy knowledge and I am over the age of eighteen (18) years and competent to provide this affidavit. I have given an expert opinion in this matter and my qualifications al.eset forth in my curriculum vitae. I standby my damagescalculationsin my May 200g opinion and the conclusion that chuming of the account had occurred. In forming my opinion I reviewed years of hading activity as discussedin my report, accourt Etatements, and personally met with Mr. shammami prior to reaching my opinion. AFFIANT FTIRTI{ERSAYBTH NOT, Date: 4E/aat/ In the case Mike Shammami is my professional of it opinionthat churninghas occurred this case.I havereached conclusion studying tradingpattems in this by the in this account.On numerous occasions, advisoropened cioseda posiliin in one the and daywith a buy andsell on the same day,only to havethe exactsame porition reestablished next dayandsold againthe the next day. This is not in ihe clientsbest interest, sincethe client is beingcharged commission startthe trade,thena a to commission selltheposition, to onlyto be charged additional an commission next the dayto reestablish same the positionandsubsequently positionis closedout that same the day, In determining excessive if tradinghastakenplacea measurement trading of activityto account equityis an important part of determining excess if tradinghas occurred.This canbe doneby examining coupleof differentratios: The annualized a Turnover Ratioandthe Commission Equityratio. Thefirst stepis to examine to the Annualized Tumoverratio: Annualized Turnover Ratio: (TotalPurchases/Average Equity)x (Numberof MonthsTraded,ll2) If the account Mike Shammami examined for is usingthis ratio his total purchases are $6,755,053. average His equityin the account $26,600.29 the12months June is for of 2005to May of 2006. This is his average equityposition aftertakinginto account the advisorhadtold Mr. Shammami usemarginto furtherhis gains. This ratio is to extremely largeat 253.9466. Thenext stepis to examine Commission EquityRatiowhich consists the to of thetotal commissions charged it relates the average as to equityof the clientsaccount overa periodof time. CommissionAverage / EquityRatio The commission clientwascharged $7802 andhisaverage the are .23 equityduringthis timewas526,600.29. clients The commission Equityratiois 0.2933i4. Thisis an to extremely largenumber. Sincein my experience numberover2o/ofor advisor's any an book of business tended makemanagers to nervous their FinancialConsultants that were tradingexcessively their clientsaccounts. in This is not to saythat oneclientwould not be above2%o,but whenthis numberis starting almostreach30o/othatis of line an to out considered excessive. In additionanother stepto examine the Total Cost/ Average is Equity ratio. This takesinto account margininterestincomein the aboveequation.This canalsobe the examined this case. in Total Cost / Average Equity Ratio Thetotalcosttheclientwascharged duringthistime was$10,683.09 the clientpaid so in q2.880:80 margininterest.If thisnumbeiis calculated clients the ratiolumpsto 0'401613 40o/o his totalequitywentto commissions margininterest ot of and during these months. 12 In my examination bothaccounts Mr. Shammami totallosses of for his of $76530.22 and, theotheraccount with losses $132,222.38 of should returnto him. Ihe total sumof be client. and

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