Michael Resciniti Suspended by FINRA for Executing Unauthorized Transactions

shutterstock_175835072-300x199The investment lawyers of Gana Weinstein LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Michael Resciniti (Resciniti). According to BrokerCheck records, Resciniti was suspended by FINRA in December 2017 for seven months.  In addition, Resciniti has been subject to five customer disputes and three regulatory orders. Three of the customer disputes are still pending.  Many of the claims allege churning and unauthorized trading.

In November 2017, FINRA found that Resciniti executed 31 unauthorized transactions in two of his customer’s accounts. The duration of his suspension is 7 months.

In addition, in February 2016, Resciniti resolved a bankruptcy filing and has a tax lien of over $115,000.  Bankruptcies and large tax liens are a potential sign that the advisor has difficulty managing their own finances.  FINRA provides this information to the public because it is material for consumers to know whether or not their advisor’s financial situation influences the advisor’s recommendations.

In November 2017, customers alleged that from August 2016 to November 2017, Resciniti engaged in churning of accounts, unsuitable recommendations, and breach of fiduciary duty. The customer has requested damages of $184,241. This dispute is still pending.

In March 2015, a customer alleged that Resciniti engaged in excessive use of margin. The customer has requested damages of $5,300. This dispute is still pending.

When a broker recommends an investment to an investor, the broker has a duty to:

  • Understand the nature of the investment’s risks, rewards, and strategy before recommending the investment;
  • Make only suitable recommendations to the investor based upon the investor’s objectives, needs, and circumstances;
  • Furnish information to the investor that would be material to the investor’s decision about the investment recommendation; and
  • Not misrepresent or omit material information.

A broker is also not allowed to engage in any unauthorized trading. This activity occurs when a broker trades an investor’s account without any prior permission or approval from the investor.  The NYSE Rule 408(a) and FINRA Rules 2510(b) obligate brokers to discuss all trades with their investors before the trade is put in place. These rules specifically prevent discretionary trades from happening in non-discretionary customer accounts. Unauthorized trading can be legally pursued in discretionary accounts as long as there is substantial documentation to prove that the account is in fact discretionary.

Resciniti has spent 17 years in the securities industry. From 2016 to 2018, Resciniti was registered with Spartan Capital Securities, LLC. Rescinit was previously registered at 18 preceding firms, including New Castle Financial Services LLC, Continental Broker-Dealer Corp., and Harrison Securities Inc., which were entities expelled by FINRA.  Resciniti is currently not registered with any firm and is enduring a 7 month suspension imposed by FINRA.

Gana Weinstein LLP’s investment fraud attorneys represent investors who have suffered securities losses due to the mishandling of their accounts due to claims of unsuitability and misrepresentation. 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.