According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Joseph Desapio (Desapio), previously associated with Spartan Capital Securities, LLC, has been subject to at least one disclosable event. These events include one regulatory event. Several of those complaints against Desapio concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.
FINRA BrokerCheck shows a final customer complaint on March 08, 2024.
Without admitting or denying the findings, Desapio consented to the sanction and to the entry of findings that he willfully violated Exchange Act Rule 15l-1, Regulation BI, by recommending quantitatively unsuitable trades in accounts held by customers, one of whom was a senior. The findings stated that Desapio’s customers relied on his advice and routinely followed his recommendations and, as a result, Desapio exercised de facto control over the customers’ accounts. Desapio’s trading resulted in high turnover rates and cost-to-equity ratios that were well above the traditional guideposts, as well as significant losses. Desapio’s trading in these customer accounts generated total trading costs of $136,023, including $111,798 in commissions, and caused $92,546 in realized losses. Desapio’s member firm settled with two customers after they filed an arbitration claim against them along with Desapio and the firm alleging sales practice violations. The findings also stated that Desapio borrowed $20,000 from a customer, with whom he had a prior personal non-familiar relationship. Desapio did not provide prior notice to or obtain written approval from his firm for the loan. The customer’s funds were recovered in connection to their settlement with the Desapio’s firm.
Securities Lawyers Blog
