BOSTON, March 24 (UPI) -- A Massachusetts stock broker used compensation paid the widow of a terrorism victim to generate commissions for himself, regulators allege.
The U.S. Securities and Exchange Commission filed a civil complaint Wednesday against James Konaxis of Beverly, while Massachusetts Secretary of State William Galvin barred him from doing business in the state, The Boston Herald reported. Konaxis was fired last year from Sentinel Securities of Reading, Mass.
Regulators say Konaxis lost $2 million in two years for a California woman whose husband was killed in the Sept. 11, 2001, terrorist attacks by actively trading stocks in her account. He made $550,000 in commissions through alleged "churning," or making trades mostly for the commissions, while her account dropped from $3.7 million to $1.6 million.
"Churning is an aspect of the brokerage industry that is all too familiar, but this one stands out because of the source of the funds," Galvin said. "It's an easy way to make quick bucks off commissions, and it almost never benefits the clients."
Sentinel said the woman has been reimbursed with interest.
