We have reviewed hundreds of FINRA disciplinary records over our years on Wall Street and in securities litigation. The recent case of former Merrill Lynch broker James Richardson stands out as a textbook example of churning that devastated retirement accounts. FINRA barred Richardson permanently in April 2026 after finding he engaged in excessive trading that cost elderly clients more than $890,000 in losses.
Richardson operated out of Merrill Lynch’s Scottsdale, Arizona office from 2019 until his termination in late 2025. According to FINRA’s acceptance, waiver, and consent document, he recommended high-frequency trading strategies in client accounts held at his member firm. The regulator determined Richardson executed over 450 trades across 23 client accounts during a 14-month period. Annualized turnover rates exceeded 12.0 in several accounts, far above the 4.0 threshold that typically indicates churning.
How churning destroys retirement security
Churning represents one of the most insidious forms of broker misconduct because it often goes unnoticed until substantial damage accumulates. Each trade generates commissions and fees that enrich the advisor while steadily eroding the investor’s capital. Richardson allegedly favored complex options strategies and leveraged exchange-traded products that generated substantial spreads for the firm.
The victims in this case ranged in age from 68 to 84 years old. Several were widows who had entrusted their late husbands’ retirement savings to Richardson after decades of relationship building. FINRA’s investigation revealed that Richardson failed to disclose the full extent of trading costs and misrepresented the risk profile of the strategies he employed.
FINRA enforcement actions on the rise
Richardson’s case fits a disturbing pattern we have observed throughout 2026. FINRA disciplinary actions involving senior investors have increased 34% year-over-year according to the regulator’s March statistics. The median age of victims in these cases is 71 years old, with average losses exceeding $425,000 per account.
FINRA specifically cited Richardson’s violation of Rule 2111, the suitability rule that requires brokers to have a reasonable basis for believing their recommendations are suitable for particular customers. The regulator also found he violated Rule 2010, which requires members to observe high standards of commercial honor and just and equitable principles of trade.
Red flags every investor should recognize
We advise investors to scrutinize their account statements monthly for warning signs. Unusually high numbers of trades, especially options or margin transactions, warrant immediate investigation. Sudden increases in commissions or unexplained fees also indicate potential problems. Advisors who discourage clients from reviewing statements or who resist providing written explanations of their strategies deserve heightened scrutiny.
Account turnover exceeding 4.0 annually generally indicates excessive trading. Cost-to-equity ratios above 3% suggest the account must generate extraordinary returns just to break even. These metrics appear on most brokerage statements, though they are often buried in fine print.
Haselkorn & Thibaut fights for investor recovery
The securities attorneys at Haselkorn & Thibaut have spent more than 95 years combined fighting for investors harmed by broker misconduct. Their team includes former Wall Street defense attorneys who understand exactly how firms hide misconduct in trading records. They have recovered over $520 million for clients through arbitration and litigation.
Haselkorn & Thibaut operates on a contingency fee basis with no upfront costs to clients. Their 98% success rate in securities arbitration reflects deep expertise in churning cases, unsuitable recommendations, and regulatory violations. The firm maintains an AV Preeminent rating from Martindale-Hubbell, the highest recognition for ethical standards and legal ability.
Investors who suspect churning or excessive trading in their accounts should act promptly. FINRA arbitration provides a faster, less expensive alternative to court litigation. Most claims resolve within 12 to 18 months, compared to years of protracted civil litigation.
Contact Haselkorn & Thibaut today
Haselkorn & Thibaut offers free, confidential consultations to investors who have suffered losses due to broker misconduct. Their attorneys will review your account statements at no charge and advise whether you have grounds for recovery.
Phone: 1-888-885-7162 (toll-free)
Website: https://htattorneys.com
The information in this article is for educational purposes only and does not constitute legal advice. Each case is unique, and past results do not guarantee future outcomes. Investors should consult with qualified securities attorneys to discuss their specific circumstances. Statutes of limitations may apply, and delays can jeopardize recovery rights.
