Articles Tagged with Joseph Stone Capital

shutterstock_189006551-207x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Joseph Ambrosole (Ambrosole) has been subject to two customer complaints, two regulatory actions, and one tax lien during his career.  Ambrosole is currently employed by Joseph Stone Capital L.L.C. (Joseph Stone Capital).  One of the the customer complaints against Ambrosole concern allegations of high frequency trading activity also referred to as churning and unsuitable investments.

In August 2018 a customer filed a complaint alleging that Ambrosole violated the securities laws by engaging in common law fraud, breach of fiduciary duty, and negligence causing $100,000 in damages.  The claim is currently pending.

In March 2018 a customer filed a complaint alleging that Ambrosole violated the securities laws by engaging in churning, unsuitable investments, and overconcentration causing $275,000 in damages. The claim is currently pending.

In addition, Ambrosole has one financial disclosure concerning a tax lien for $57,199.  This information has been found to be material for investors to have because an advisor who cannot manage his own finances is a relevant factor for investors to consider.  In addition, a broker in financial distress may be influenced to recommend high commission products or strategies.

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shutterstock_146470052-300x205According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Erik Pica (Pica) has been subject to three customer complaints.  Pica is currently registered with Joseph Stone Capital L.L.C. (Joseph Stone).  Many of the customer complaints against Pica concern allegations of high frequency trading activity also referred to as churning, unauthorized trading, unsuitable investments, and speculative investment strategies.

The last customer complaint occurred in May 2018 when a customer alleged unauthorized trading in Rite Aid and Valeant Pharmaceutical leading to $7,613 in damages.  The claim is currently pending.

Also in May 2018 another customer alleged negligent supervision, overconcentration, and unsuitable investments causing $293,000 in damages.  The claim is currently pending.

In March 2018 another customer alleged $500,000 after claiming that Pica engaged in unsuitable investments, churning, and other claims.  The claim is currently pending.

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shutterstock_176283941-300x200The securities attorneys at Gana Weinstein LLP are currently investigating Joseph Stone Capital L.L.C. (Joseph Stone) broker Laurence Pettit (Pettit). According to BrokerCheck records, Pettit has been subject to 10 customer disputes, two civil actions, and one criminal action. The majority of these disputes allege Pettit’s  improper use of discretion, unauthorized trading, improper use of margin, and failure to follow customer instructions.

In March 2009, a customer alleged that Pettit failed to follow instructions to liquidate the investments in the customers’ account on multiple occasions. The dispute was settled at $250,000.

In October 2008, a customer alleged that Pettit failed to follow the customer’s instructions to reduce the margin percentage on the account. This dispute was settled at $40,000.

shutterstock_123758422-300x200Gana Weinstein LLP is investigating claims made by Financial Industry Regulatory Authority (FINRA) against broker David Menashe (Menashe). According to BrokerCheck records, Menashe was ordered to pay a restitution of $15,000 by the state of Montana for alleged excessive trading and unauthorized trading in June 2016.

Menashe entered the industry in 2009. He is currently registered and employed at Newbridge Securities, where he has been employed since January 2017. His past employment includes:

• Joseph Stone Capital LLC (February 2013 – January 2017)

shutterstock_20354398The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker John Fenimore (Fenimore). According to BrokerCheck records Fenimore has been the subject of at least two customer complaints. The customer complaints against Fenimore allege a number of securities law violations including that the broker made unsuitable investments and churning (excessive trading) among other claims.

The most recent customer complaint filed in June 2014 and alleged unsuitable recommendations and excessive trading from January 2010 through April 2014 claiming $250,000 in damages. The claim is still pending. In April 2013, another client filed a complaint alleging Fenimore engaged in a reckless trading. The claim settled for $210,000.

When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time. Often times the account will completely “turnover” every month with different securities. This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades. Churning is considered a species of securities fraud. The elements of the claim are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.

shutterstock_177082523The Financial Industry Regulatory Authority (FINRA) brought an enforcement action (FINRA No. 2015044589701) against broker David Khezri (Khezri) resulting in a monetary sanction and suspension. In addition, according to the BrokerCheck records kept by FINRA, Khezri has been the subject of at least 1 customer complaint. The customer complaints against Khezri alleges excessive trading among other claims.

FINRA’s findings stated that Khezri consented to sanctions that he improperly exercised discretion by effecting around 100 trades for six customers without obtaining written authorization from the customers. The firm also did not accept the accounts as discretionary. FINRA alleged that Khezri exercised discretion by executing trades days after his customers provided him oral authority. However, FINRA found that Khezri’s firm did not permit discretionary trading except for registered investment advisors (RIA) trading in the accounts of their advisory clients and Khezri was not an RIA.

Advisors are not allowed to engage in unauthorized trading. Such trading occurs when a broker sells securities without the prior authority from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature because no disclosure could be more important to an investor than to be made aware that a trade will take place.

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