Mirsad Muharemovic Suspended by FINRA for Alleged Churning
Mirsad Muharemovic (CRD #: 3122589), a broker formerly registered with Arive Capital Markets, allegedly engaged in excessive trading, according to his BrokerCheck record, accessed on February 2, 2023. Keep reading if you want to know more about his alleged conduct as a broker.
On December 7, 2022, Mirsad Muharemovic consented to the entry of findings that he allegedly engaged in excessive and unsuitable trading in two clients’ accounts between August 2016 and March 2019.
A Letter of Acceptance, Waiver & Consent (AWC) alleged that Customer A was a 64-year-old owner of a construction business. Mirsad Muharemovic allegedly recommended 101 trades, nearly all executed using margin, which were regularly accepted by the client.
Customer A’s account allegedly had an average month-end equity of approximately $126,702 for 24 months and Mirsad Muharemovic allegedly recommended purchases with a total principal value of $3,736,956. This trading allegedly resulted in an annualized cost-to-equity ratio of 54.18% and an annualized turnover rate of 14.75.
For context, cost-to-equity ratios over 20% and turnover rates above 6 are considered signs of excessive trading.
Custom A allegedly paid approximately $119,061 in commissions and fees and $18,244 in margin interest.
Customer B was a 74-year-old construction business owner. Mirsad Muharemovic allegedly recommended 64 trades, mostly executed on margin, across the client’s two accounts. Customer B allegedly paid approximately $74,338 in margin interest plus commissions and fees.
The AWC concluded that this alleged trading violated FINRA Rules 2111 and 2010.
FINRA Rule 2111
FINRA Rule 2111 defines suitable investments as securities that fit an investor’s profile, which describes a client’s age, tax status, and other characteristics. Excessive trading violates this rule.
Investors who rely on brokers for recommendations may be able to recover their losses through FINRA arbitration.
FINRA Rule 2010
FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.
Mirsad Muharemovic consented to the following sanctions:
- $5,000 fine
- 9-month suspension
- Restitution of $211,643 plus interest
His suspension began on December 19, 2022, and will end on September 18, 2023.
You can read the full AWC here.
On August 13, 2019, an investor filed a dispute naming Mirsad Muharemovic and other brokers, as well as Arive Capital Markets and Alexander Capital, L.P. in allegations of the following:
- Common law fraud
- Excessive trading and other violations of suitability
- Fraudulent and negligent misrepresentation
- Other negligence
- Failure to supervise
- Breach of contract
- Violations of FINRA rules concerning discretionary accounts
- Violations of federal and Minnesota state laws
The investor sought $307,042 in damages and received a settlement of $115,000. You can read a copy of the arbitration agreement here.
A dispute filed on July 16, 2018, alleged Mirsad Muharemovic recommended unsuitable investments. The client sought $1 million and received a settlement of $72,500.
Mirsad Muharemovic has passed the following exams:
- Series 63 – Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
He previously for the following firms:
- Arive Capital Markets (CRD#:8060)
- Cape Securities (CRD#:7072)
- J.P. Turner & Company (CRD#:43177)
- American Express Financial Advisors (CRD#:6363)
- IDS Life Insurance Company (CRD#:6321)
- Newbridge Securities (CRD#:104065)
- Milestone Financial Services (CRD#:43295)
- Seaboard Securities (CRD#:755)
- Gilford Securities (CRD#:8076)
Kurta Law Can Help
If you worked with Mirsad Muharemovic and you have concerns about your investments, please contact us today at 877-600-0098 or firstname.lastname@example.org 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.