August 2016- Mineola, NY
The FINRA records of Lawrence P. Sullivan, a stock broker who is not currently licensed and who was last employed by Joseph Stone Capital disclose a currently pending regulatory event and a termination from employment.
The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.
Office of the Commissioner of Securities and Insurance, Montana State Auditor Case No. SEC-2016-124
On June 8, 2016, the Montana Commissioner of Securities and Insurance (CSI) filed a complaint (CSI Case Number SEC-2016-124) naming Lawrence Sullivan, who at the time was a salesperson with Joseph Stone Capital and other parties, including:
- Joseph Stone Capital, Lawrence’s former employing firm
- James Pardy-Chief Compliance Officer of Joseph Stone
- Adam Maggio-a salesperson with Joseph Stone
- David Menashe–a salesperson with Joseph Stone
- Frank Spadaro-a salesperson with Joseph Stone
The Montana CSI complaint alleges that in January 2016, the Montana CSI received a cold call from Sullivan who was transferred to an analyst for CSI. Sullivan pitched an investment about Paypal to the Montana CSI employee who then informed Sullivan that he had called the Montana State securities regulators. At that point, Sullivan denied he was trying to solicit an investment and hung up.
That same day Montana CSI requested complete records regarding all of Joseph Stone’s Montana clients. Analysis of the records revealed churning in the accounts of Montana residents , overcharging of commissions and other statutory violations.
According to the Montana CSI complaint with regard to one of the accounts handled by Frank Spadaro : “The total of all trades resulted in $4,052,938.36 in purchases and $3,747,491.70 sales, with corresponding Looper[l] tumover rates of 30.52 and,28.22 respectively “
Churning & The Looper Formula
The Looper turnover rate calculates the dollar amount of purchases during a time period divided by the average account equity annualized. The 2-4-6 ‘rule of thumb’ turnover rate is often used to generally analyze trading:
- Twice a year is ‘suggestive’ of excessive trading
- Four times a year is ‘indicative’ of excessive trading
- Six times a year turnover is ‘conclusive’ of excessive trading
According to public records:
- On January 19, 2016, Lawrence Sullivan was discharged by Joseph Stone Capital
- David Manashe is now registered with Newbridge Securities Corporation
If you have questions about an account handled by Joseph Stone Capital call to speak with an experienced securities attorney.
Rex Securities Law , with offices in Boca Raton, FL, and Austin, TX, provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.
Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
Florida-561 391 1900