← Broker database 2023-12-07
Arthur McQuaide Suspended for Excessive and Unsuitable Trading
According to FINRA, Arthur Bruce McQuaide was suspended from association with any FINRA member in all capacities for six months for engaging in excessive and quantitatively unsuitable trading in the accounts of two senior customers. The customers relied on McQuaide's advice and routinely followed his recommendations, giving him de facto control over their accounts.
McQuaide's trading caused the customers to suffer collective realized losses of $190,839 while paying total trading costs of $201,684, including commissions of $160,360. This means the customers paid more in trading costs than their total investment losses—a clear indication of excessive trading designed to generate commissions rather than serve the customers' investment objectives.
Excessive trading, also known as churning, is one of the most harmful practices in the securities industry. It occurs when a representative exercises control over an account and trades excessively to generate commissions, without regard to the customer's investment objectives. Senior customers are particularly vulnerable to this abuse because they may be more trusting and less likely to question their advisor's recommendations.
In light of McQuaide's financial status, no monetary sanction was imposed, but the six-month suspension removes him from the industry temporarily. The fact that trading costs exceeded investment losses demonstrates how destructive churning can be. Senior investors and their families should carefully monitor account activity for excessive trading, especially when commissions seem disproportionate to account size or the customer's investment goals.