Phillip A. Noto II and Barry T. Eisenberg were both censured by the Securities and Exchange Commission on June 29th, 2018. Both men are managers at a securities brokerage firm known as Alexander Capital L.P. Three of the firm’s brokers have been charged with mismanaging customer’s accounts. Noto and Eisenberg are being held responsible for failing to supervise said brokers.
The brokers have been charged with churning their client’s accounts, as well as making unauthorized trades. These trades resulted in significant losses to the customers; however, due to the excessive churning and trading fees, resulted in large commissions for the three brokers.
Although Alexander Capital was found to be greatly lacking in adequate supervisory procedures that give managers the ability to prevent actions such as those taken by these three brokers, the Securities and Exchange Commission found that Phillip A. Noto II and Barry T. Eisenberg disregarded all the signs of excessive trading taking place under their supervision.
Marc P. Berger, the director of the Securities and Exchange Commission’s New York regional office, had this to say on the matter: “Broker-dealers must protect their customers from excessive and unauthorized trading, as well as unsuitable recommendations. Alexander Capital’s supervisor system—and its personnel—failed its customers, and today’s actions reflect our continuing efforts to protect retail customers by holding firms and supervisors responsible for such failures.”
The Securities and Exchange Commission charged Noto with failure to supervise two of the brokers. For his actions he was given a permanent supervisory bar and a fine of $20,000. Eisenberg was charged with failure to supervise one of the brokers. For his actions he was given a five-year supervisory bar and a find of $15,000. Both of the manager’s fines went to a Fair Fund designed to return the ill-gotten gains to the victimized customers.
Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with Alexander Capital or Phillip A. Noto II or Barry T. Eisenberg, please contact Oakes & Fosher for a free and private consultation.