Broker John Cangialosi Sanctioned by Multiple Regulators

shutterstock_101456704Investment attorneys at Gana LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against John Cangialosi (Cangialosi) alleging unsuitable investments, fraudulent and negligent acts, breach of contractual requirements, churning, and negligent misrepresentation among other claims.  According to brokercheck records Cangialosi has been subject to five customer complaints, two financial disclosure – one bankruptcy and one tax liens, one employment separation for cause, and two regulatory events.

In April 2013, FINRA found that Cangialosi violated FINRA rules that require the timely disclosure judgments or liens.  In this case FINRA found that Cangialosi failed to timely disclose six liens and fined him $5,000 and suspended Cangialosi for three months.  In January 2016 the state of Michigan denied Cangialosi’s application to engage in securities business in the state on the grounds that Cangialosi engaged in dishonest and unethical practices within the last 10 years supporting the denial of his registration application.

In 2009 J.P. Turner & Company, LLC permitted Cangialosi to resign after allegations were made that the broker engaged in unauthorized trading in a client’s account.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly.  This obligation includes making only suitable investments for their client.  The suitable analysis has certain requirements that must be met before the recommendation is made.  First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence.  Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors.  Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives.  These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

Cangialosi entered the securities industry in 2001.  From August 2006 through February 2009, Cangialosi was registered with JP Turner.  Thereafter, from October 2009 until June 2012, Cangialosi was registered with Brookstone Securities, Inc.  From June 2012 through August 2013 Cangialosi was associated with Joseph Gunnar & Co. LLC.  From August 2013 through November 2016 Cangialosi was associated with Legend Securities, Inc.  Finally, since November 2016 Cangialosi has been associated with Worden Capital Management LLC out of the firm’s New York, New York office location.

The number of events listed on Cangialosi brokercheck is high relative to his peers.  According to InvestmentNews, only about 12% of financial advisors have any type of disclosure event on their records.  Brokers must publicly disclose certain types of reportable events on their CRD including but not limited to customer complaints.  In addition to disclosing client disputes brokers must divulge IRS tax liens, judgments, and criminal matters.  However, FINRA’s records are not always complete according to a Wall Street Journal story that checked with 26 state regulators and found that at least 38,400 brokers had regulatory or financial red flags such as a personal bankruptcy that showed up in state records but not on BrokerCheck.  More disturbing is the fact that 19,000 out of those 38,400 brokers had spotless BrokerCheck records.

Gana LLP’s securities fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts due to claims of fraud and negligence.  The majority of these claims may be brought in securities arbitration before FINRA.  Our consultations are free of charge and the firm is only compensated if you recover.