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)

Feb 25

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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:[phone]
Email: Dsulli I [e-mail]
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