James Pecoraro Subject of FINRA Investigation Alleging Excessive Trading

James Pecoraro (CRD #: 2440231), a broker registered with Spartan Capital Securities, has been investigated by FINRA, according to his BrokerCheck record, accessed on March 28, 2025. Keep reading to learn more about his alleged conduct as a broker.

FINRA Investigation

On February 12, 2025, FINRA recommended that disciplinary action be brought against James Pecoraro, alleging that he engaged in unsuitable and excessive trading in violation of FINRA Rules 2020, 2010, 2111, Securities Exchange Act of 1934 Section 10(b) and Rule 10b-5 thereunder, and the Best Interest Obligation under Regulation Best Interest.

FINRA Rule 2020

FINRA Rule 2020 forbids the use of deceptive, manipulative, and otherwise fraudulent methods to influence the purchase and sale of securities. This includes the misrepresentation or omission of information relating to investments, such as their fees, risks, or potential returns.

FINRA Rule 2010

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.

FINRA Rule 2111

FINRA Rule 2111 requires brokers to tailor their investment recommendations to suit investors’ profiles. An investor’s profile includes information such as their age, tax status, risk tolerance, financial goals, and investing experience.

Investors who rely on brokers for recommendations may be able to recover their losses by pursuing FINRA arbitration.

Securities Exchange Act of 1934

Section 10(b) of the Securities Exchange Act of 1934 prohibits the use of deceptive, manipulative, and otherwise fraudulent practices relating to the purchase and sale of securities. Within this section, Rule 10b-5 prohibits fraudulent schemes, as well as untrue statements and misleading omissions of fact.

Regulation Best Interest

Regulation Best Interest (Reg-BI) is an SEC regulation that requires brokerage firms to put their clients’ best interests first. For example, firms must conduct reasonable due diligence when researching investments to ensure their recommendations are suitable for the investor.

Investor Dispute

On January 2, 2025, an investor named James Pecoraro in allegations of negligence and negligent supervision, misrepresentation, deception, and exploitation. The client seeks $500,000 in this pending dispute.

FINRA Rule 3110

FINRA Rule 3110 requires that firms establish supervisory systems to ensure their compliance with securities regulations. Firms must appoint supervisors and provide them with Written Supervisory Procedures (WSPs) to follow.

Maryland Regulatory Action

On October 26, 2022, the Maryland Securities Commissioner issued an Order to Show Cause & Summary Suspension following James Pecoraro entering into an AWC with FINRA wherein he consented to a nine-month suspension.

James Pecoraro consented to not reapply for registration as a broker-dealer, broker, investment adviser or investment adviser representative with the State of Maryland.

FINRA Suspension

On August 4, 2022, James Pecoraro consented to the entry of findings that he allegedly excessively traded three clients’ accounts from October 2016 through May 2019.

According to a Letter of Acceptance, Waiver & Consent (AWC), James Pecoraro allegedly recommended a pattern of high-speed, high-cost trading in these accounts. He allegedly also frequently placed stop-loss orders that would liquidate clients’ securities positions at certain prices, allowing him to make new recommendations.

During the relevant period, James Pecoraro allegedly engaged in the following trading activity:

• Customer A: Executed 109 trades, resulting in an annualized turnover rate of 13.47 and an annualized cost-to-equity ratio of 57.58%. This allegedly also resulted in $31,007 in realized losses and total trading costs of $41,432, including $35,370 in commissions.
• Customer B: Executed 69 trades, resulting in an annualized turnover rate of 46.64 and an annualized cost-to-equity ratio of 175.19%. This allegedly also resulted in $27,850 in realized losses and total trading costs of $37,433, including $33,516 in commissions.
• Customer C: Executed 147 trades, resulting in an annualized turnover rate of 57.97 and an annualized cost-to-equity ratio of 174.03%. This allegedly also caused $107,161 in realized losses and generated trading costs of $105,188, including $96,551 in commissions.

When evaluating potentially excessive trading, an annualized turnover rate of six or more and an annualized cost-to-equity ratio over 20% are considered red flags.

The AWC concluded that these allegations constituted violations of FINRA Rules 2111 and 2010.

Sanctions

James Pecoraro consented to the following sanctions:

• Nine-month suspension from associating with FINRA members
• $10,000 fine
• Restitution of $68,886, plus interest

His suspension ran from September 6, 2022, through June 5, 2023. You can read the full AWC here.

Tax Lien

On May 31, 2022, James Pecoraro incurred a $115,092 tax lien.

Background Information

James Pecoraro has passed the following exams:

• Securities Industry Essentials Examination – SIE
• General Securities Representative Examination – Series 7
• Uniform Securities Agent State Law Examination – Series 63

James Pecoraro is a registered broker in 22 states.

He has also worked for the following firms:

• SW Financial (CRD#:145012)
• Primary Capital (CRD#:127921)
• Rockwell Global Capital (CRD#:142485)
• Prestige Financial Center (CRD#:30407)
• J.P. Turner & Company (CRD#:43177)
• Brundyn Securities (CRD#:124493)
• LH Ross & Company (CRD#:37920)
• Harrison Securities (CRD#:14103)
• GBI Capital Partners (CRD#:14623)

Kurta Law Can Help

If you worked with James Pecoraro and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm that exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.