July 7, 2020
Former registered representative Frank Venturelli recently submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) Department of Enforcement to resolve allegations of violating securities industry rules and regulations for excessively trading customer accounts.
According to his FINRA BrokerCheck report, Venturelli was associated with three FINRA member firms since obtaining his securities license. He was associated with First Standard Financial Company LLC in Red Bank, New Jersey from November 2014 to March 2016 and April 2016 to September 2019 and Arive Capital Markets in Bay Ridge, New York from September 2019 to December 2019.
FINRA Department of Enforcement alleges in the AWC that between July 2016 and November 2018, Venturelli excessively traded three customers’ accounts which resulted in high turnover rates and cost-to-equity ratios. Turnover rate represents the number of times a securities portfolio is traded for another portfolio and cost-to-equity ratio is the break-even point or the point in which commission and trading fees are exceeded and a customer may see a return. In general, FINRA considers a turnover rate of 6 or a cost-to-equity ratio above 20% to indicate excessive trading. The three customers experienced turnover rates between 30 and 60 and cost-to-equity ratios between 88% and 147%. The hardest hit customer incurred $373,226 in losses and paid commissions and fees totaling $169,803.
Based on the foregoing, Venturelli violated FINRA Rules 2111 and 2010. Without admitting or denying the allegations made against him, Venturelli consented to a suspension from associating with any FINRA member firm in any capacity for eleven months and $30,000 in partial restitution due to demonstrating a limited ability to pay. Venturelli’s FINRA BrokerCheck report reveals that a customer filed a dispute with a $50,000 damage request alleging excessive and unsuitable trading.
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