A U.S. District Court has ordered a Coral Gables, Fla.-based broker to pay more than $1.5 million in disgorgement and fines in a settlement, after claiming he defrauded retail customers with excessive short-term trading in his work for a New York broker-dealer from 2012 to 2014.

The Securities and Exchange Commission first brought charges against the broker, Emil Botvinnik, in 2018. A former registered rep with New York-based Meyers Associates, Botvinnik “defrauded five retail customers by recommending frequent, short-term trades which generated large commissions for [him] but were almost guaranteed to lose money for his customers,” the SEC said in its complaint.

Meyers Associates changed its name to Windsor Street Capital in 2016, and was eventually expelled from membership by the Financial Industry Regulatory Authority in 2018. Finra also fined the firm $1 million (plus disgorgement of gains), accusing it of charging customers excessive markups and markdowns.

The SEC claimed that Botvinnik recommended a strategy with frequent trades to customers while charging them expensive commissions for every transaction. “The frequency of Botvinnik’s trading, coupled with the commissions and fees on every trade, made it almost certain that his customers would lose money from this strategy,” the complaint said. “Indeed, the customers’ investments would need to achieve annual returns of approximately 31% to 150% just to pay for the transaction costs associated with Botvinnik’s recommendation.”

The SEC said Botvinnik charged the customers commissions on both losing and winning trades, setting the commissions himself. His agreement with Meyers was that he would get 90% of the commission he generated for the firm. The five customers were told to hold the securities he recommended for an average of 6.7 days before selling.

Because of the frequent trading, the customers paid a total of $5.1 million in commissions and other trading costs, the SEC said.

Botvinnik worked for 11 firms in his 13 years in the industry. The last, according to his BrokerCheck page, was Worden Capital Management, where he worked until 2018.

The original SEC complaint had also named Jovannie Aquino, another Meyers-Windsor Street broker, for defrauding seven retail customers. Those charges were settled in 2019.

The U.S. District Court for the Southern District of New York ordered Botvinnik to disgorge $1,140,996.48 as well as $208,155.56 in prejudgment interest, as well as pay the $160,000 civil penalty. He did not admit or deny the SEC’s allegations in consenting to the final judgment. The SEC has barred him from association with any broker-dealer or investment advisor.