Efthimios Petrou Suspended by FINRA After Alleged Excessive Trading
Efthimios Petrou (CRD #: 2672840), a broker formerly registered with Arive Capital Markets, has been suspended by FINRA, according to his BrokerCheck record, accessed on October 22, 2022. Investors may also know this broker as Tim Petrou.
FINRA Suspension
On August 19, 2022, Efthimios Petrou consented to the entry of findings that he allegedly traded excessively and unsuitably in a retired client’s account between January 2017 and October 2018.
A Letter of Acceptance, Waiver & Consent (AWC) alleges that the client was a 67-year-old retired pharmacist with limited knowledge of the stock market who accepted 73 trades made on margin recommended by Efthimios Petrou.
These trades allegedly caused the client to pay a total of $96,306.65 in commissions, trade costs, and margin interest, resulting in a cost-to-equity ratio of more than 86%. By comparison, a cost-to-equity ratio of more than 20% is considered a sign of excessive trading.
Further, Efthimios Petrou allegedly recommended purchases with a total principal value of approximately $2,441,587.34, despite the average monthly equity of the client’s account allegedly approximating $60,537.26. The client allegedly experienced a loss of approximately $17,000 as a result of these recommendations.
The AWC concludes that these alleged trades constituted violations of FINRA Rules 2111 and 2010.
FINRA Rule 2111
FINRA Rule 2111 requires brokers to evaluate the suitability of an investment for their investor’s financial goals. Brokers must use the information described in an investor’s profile, such as their age, tax status, and other investments.
Excessive trading, also called churning, violates the requirement for quantitative suitability. This means that the overall trading activity in an account must be suitable when taken as a whole, as much as individual trades.
Investors who rely on brokers for recommendations may be able to recover their losses by seeking out FINRA arbitration.
FINRA Rule 2010
FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.
Sanctions
Efthimios Petrou consented to the following sanctions:
- $5,000 fine
- 6-month suspension
- Restitution of $96,306.65 plus interest, paid to the client
His suspension began on September 6, 2022, and will end on March 5, 2023.
You can read a copy of the AWC here.
Background Information
Efthimios Petrou has passed the following exams:
- Series 63 – Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
- Series 24 – General Securities Principal Examination
He previously worked for the following firms:
- Arive Capital Markets (CRD#:8060)
- J.P. Turner & Company (CRD#:43177)
- Investec Ernst & Company (CRD#:266)
- Royce Investment Group (CRD#:10494)
Kurta Law Can Help
If you worked with Efthimios Petrou and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.
For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.
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