Galvin goes after California broker, firm after it reaped at least $750,000 on UIT trades

Massachusetts regulators have charged StockCross Financial Services and one of its brokers with engaging in improper trading practices.

Specifically, it charges that the firm and its representative, Peter Cunningham of Los Angeles, recommended that customers, 30% of whom were Massachusetts investors, buy and then sell unit investment trusts before their maturity date. That resulted in losses for investors and more commissions for the broker and the firm, regulators allege.

Mr. Cunningham and StockCross, which was founded in Boston and is currently based in Beverly Hills, Calif., reaped $750,000 in commissions from short-term UIT trades made from Massachusetts residents’ accounts alone, according to William Galvin, commissioner of the commonwealth. He also charged StockCross with failure to reasonably supervise its agent.

Unknown to his customers, Mr. Cunningham was deeply in debt, having had his wages garnished by court orders, and being served with at least two foreclosure notices on his home, the state said in a release.

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The complaint seeks an order to cease and desist, censure, restitution to fairly compensate investors, an administrative fine, revocation for Mr. Cunningham, and a requirement that StockCross hire an independent compliance consultant to review its supervisory procedures.