According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Joseph Ambrosole (Ambrosole), previously associated with Joseph Stone Capital L.l.c., has at least 6 disclosable events. These events include one customer complaint, 5 regulatory events, alleging that Ambrosole recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on March 22, 2023.
AMBROSOLE IS THE SUBJECT OF AN ORDER OF A SELF-REGULATORY \<char_lb_r>\, ORGANIZATION EXPELLING HIM FROM A SELF-REGULATORY \<char_lb_r>\, ORGANIZATION.
FINRA BrokerCheck shows a final customer complaint on July 28, 2022.
Without admitting or denying the findings, Ambrosole consented to the sanction and to the entry of findings that he refused to appear for on-the-record testimony requested by FINRA in connection with its investigation concerning an amended Uniform Termination Notice for Securities Industry Registration (Form U5) filed by his member firm disclosing a customer complaint alleging that Ambrosole engaged in unsuitable trading.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $853,231.33 on July 30, 2021.
ALLEGATIONS IN ATTORNEY LETTERSTATING “UNSUITABLE TRADING”.\, DATES: FROM FEBRUARY 2021 UNTIL MAY 2021
FINRA BrokerCheck shows a pending customer complaint on June 17, 2021.
On June 17, 2021, the Maryland Securities Commissioner filed an Order to Show Cause directing the broker to show cause why an order should not issue preventing the broker from engaging in the activities of an agent in the state. The Maryland Securities Commissioner also issued an order of summary suspension while to the proceeding is pending. The basis for the State action are prior regulatory disclosures unrelated to any activities in the state of Maryland.
FINRA BrokerCheck shows a final customer complaint on April 07, 2021.
Without admitting or denying the findings, Ambrosole consented to the sanctions and to the entry of findings that he excessively and unsuitably traded the accounts of two customers. The findings stated that the first account belonged to an elderly customer who began to sustain permanent, progressive, neurological and cognitive impairments. This customer’s account had an average monthly equity of approximately $300,000 and Ambrosole recommended and executed 157 trades, which caused the customer to pay more than $126,000 in commissions and other trading costs. Ambrosole’s recommended trades resulted in an annualized cost-to-equity ratio of approximately 20 percent, which means the customer’s account would have had to grow by more than 20 precent annually just to break even. The second account belonged jointly with the first and had an average monthly equity of approximately $70,000. Ambrosole recommended and executed 40 trades in this account which caused the customers to pay more than $20,400 in commissions and other trading costs. Ambrosole’s recommended trades resulted in an annualized cost-to-equity ratio of approximately 35 percent in the joint account. The customers relied on Ambrosole’s advice and accepted his recommendations. Collectively, Ambrosole’s recommendations caused the customers to pay $147,031.50 in commissions and other trading costs.
FINRA BrokerCheck shows a final customer complaint on March 15, 2021.
Ambrosole engaged in heavy unsuitable trading which resulted in high commissions for himself and losses to his elderly and ill client of at least $175,000
In the financial industry advisors must meet the requirements of the SEC’s Regulation Best Interest (Reg BI) in providing investment advice and services. Reg BI established a ‘best interest’ standard for brokerage firms and registered representatives. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. Reg BI applies when brokers recommend a retail investor engage in securities transaction or an investment strategy involving one or more securities. Reg BI also applies to financial advice concerning the transfer of funds and opening of accounts.
Another aspect of the care obligation is focusing on the client’s specific needs which brokers must reasonably understand through obtaining information for the client’s investment profile. In completing a customer’s investment profile the advisor should include information such as the investor’s investment time horizon; liquidity needs; risk tolerance; experience with various investment vehicles; investment objectives and financial goals; assets and debts including outside investment accounts; marital status; tax information; age; and other relevant information that may be individual to the investor that the advisor would need to know to properly render advice or provide services. Reg BI was meant to enhance the duties that registered representatives have to their clients by applying fiduciary principles to transactions and investment strategies by prohibiting brokers from placing their own financial interests ahead of the best interests of their client – the investor. There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which require brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations include three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions.
The care obligation also requires the broker to address the client’s specific needs through obtaining specific investment profile information on the client. The associated person typically will ask the customer for information such as the investor’s risk tolerance or ability to withstand account value declines or increases; experience with investments available; investment objectives and goals; investment time horizon; liquidity needs; assets such as investment accounts held at other financial institutions; tax information; their age and retirement plans; and other information that a customer may want to provide to the advisor to help them to properly address the services needed. The associated person must then apply both their reasonable diligence into various investment options as well as the information gathered as to the investor’s specific needs when considering the investment recommendation. The broker must explore various alternative investment options available to address these needs and determine that there is a reasonable basis to believe that the recommendation or service being recommended is in the retail investor’s best interest. Finally, an advisor must also analyze the specific account features offered and determine whether their client can benefit from them in order to meet their care obligations. While securities and investments come with costs that must be considered, the type of securities account also has changes the cost equation for the investor and can change the retail customers’ future investment returns. The associated person must consider the different types of securities accounts for their client and determine whether or not the cost or features are reasonably needed for the client or if the customer’s current account costs and features are superior to solutions available to the advisor. In any event, the type of account and services recommended must be in the investor’s best interest.
Ambrosole has been in the securities industry for more than 8 years. Ambrosole has been registered as a Broker with Joseph Stone Capital L.l.c. since 2017.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.