FINRA has barred Rasheed Richard Adams from associating with any member firm after finding that he churned customer accounts while registered with Caldwell International Securities Corp. The decision marks another enforcement action against a broker who allegedly placed his own commissions ahead of his clients’ financial security.
The firm and the broker at the center of the case
Adams, also known as Richard Aree Adams, held a securities license while working at Caldwell International Securities Corporation. According to FINRA disciplinary records, he engaged in excessive and unsuitable trading that generated unnecessary commissions while eroding investor principal.
Churning occurs when a broker executes trades primarily to earn commissions rather than to benefit the customer. FINRA said Adams used a pattern of activity that was excessive in light of his customers’ stated objectives and account sizes.
He was previously registered with PHD Capital and E1 Asset Management Inc. before joining Caldwell International Securities. His BrokerCheck number is 2973741, and the disciplinary record now shows a bar in all capacities.
What churning looks like in practice
Churning is not always obvious to an investor reviewing monthly statements. A broker may recommend frequent trading in stocks, options, or mutual fund classes, presenting each trade as a strategic adjustment.
The red flags often include high turnover ratios, commission costs that exceed reasonable benchmarks, and a portfolio that bears little resemblance to the customer’s stated risk tolerance. In Adams’ case, FINRA determined that the activity crossed the line into intentional misconduct.
Investors who suspect churning in their own accounts should compare their annual commission costs against total account value. If commissions exceed 3 to 5 percent of the account balance in a single year, the activity may warrant a closer look by an outside expert.
| Broker | Firm | CRD number | Sanction |
|---|---|---|---|
| Rasheed Richard Adams | Caldwell International Securities Corp. | 2973741 | Barred |
How churning damages retiree portfolios
For conservative investors aged 55 to 75, churning is especially destructive. A retiree living on fixed income cannot afford to lose principal to excessive trading costs.
When a broker places 50 or 100 trades per year in an account that should hold dividend-paying stocks or bonds, the commission drag compounds quickly. The customer may see a lower account balance without understanding why, since each individual trade appears small on the statement.
What affected investors can do now
Investors who worked with Adams while he was at Caldwell International Securities should review their account history for unusual trading frequency. Statements can be obtained directly from the clearing firm if the introducing firm is uncooperative.
FINRA arbitration allows investors to recover losses caused by churning without going to court. The process is faster than litigation, and most claims are resolved within 12 to 18 months. Evidence of excessive trading is usually documented in the monthly statements.
For additional context, see our SEC Fines Centaurus Financial For Bad Investment Advice To Investors, securities fraud and enforcement, SEC Alledges Sabby Management and Hal Mintz of Fraud, and SEC Charges ‘Queen of Mobile Homes’ and Company in $18.5 Million Fraudulent Investment Scheme.
