The law firm of Oakes & Fosher is presently investigating the alleged misconduct of securities broker Michael Androulakis. According to his publicly available FINRA BrokerCheck report, Michael Androulakis has been the subject of multiple customer disputes over the course of his career.

Michael Androulakis is a New York based securities broker. He has worked in the securities industry for seventeen years. During his career, he has been registered with three different securities firms.

His Registrations

  • J.P. Turner & Company (2001-2010)
  • Legend Securities (2010-2016)
  • Alexander Capital (2016-Present)

The Allegations

  • In November 2014, a customer alleged that Michael Androulakis did not make them fully aware of what margin trading meant. This case was settled for $20,000 in damages.
  • In April 2015, a customer alleged that Michael Androulakis misappropriated funds, churned his account, breached the fiduciary duty owed to him, and was overall negligent while managing his account. This case was settled for $50,000 in damages.
  • He was sanctioned by FINRA in November 2016. The finding in this matter state that he allegedly executed an unauthorized trade in a customer’s account. Due to this allegation, he was fined $5,000 and suspended for a period of ten business days.
  • He was sanctioned by FINRA once again in March 2018. The findings in this matter state that he executed 24 unsuitable leveraged exchange traded fund transactions in the accounts of three elderly customers. These transactions resulted in losses of approximately $42,000. FINRA determined that Michael Androulakis had no reasonable basis to believe these transactions were suitable. Due to these allegations, he was fined $5,000 and suspended from acting as a securities broker in any fashion for a period of three months.

What are Leveraged Exchange Traded Funds?

Exchange Traded Funds, or ETFs, are investments designed to mirror a particular index–like the S&P 500. The value of the ETF adjusts accordingly to whatever the value of the index adjusts to. A Leveraged ETF introduces a new factor into the equation. It uses borrowed funds to to increase the amount an investor might receive. For instance, for a regular ETF, if the index increases 1 percent, the ETF will do the same; however, for a leveraged ETF, when the index increases by 1 percent, the leveraged ETF might increase 2 or even 3 percent.

However, leveraged ETFs can be quite unsuitable for investors with more conservative objectives. This is because while leveraged ETFs can come with greater rewards, they also come with much greater risk. If the value of the index decreases, then the value of the leveraged ETF decreases proportionally to what it would have increased to. This means the investor is now on the hook for these significant losses.

Due to the nature of leverage, these particular securities are designed to be purchased and sold within a single trading day. While the value of the index the product is mirroring may have increased overall since the security was purchased, losses are determined by the index’s performance over every individual day. Thus, it is highly unsuitable for brokers to recommend investors hold onto their leveraged ETFs for any period longer than a day.

Oakes & Fosher Can Help

Many investors are unaware of the legal recourse available to them after losing money due to securities broker fraud and/or negligence. The truth is that investors who have lost money in this fashion may actually be entitled to damages.

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with Michael Androulakis, please contact Oakes & Fosher for a free and private consultation.