FINRA Alleges John Stapleton Engaged in Excessive Trading

John Stapleton (CRD #: 2791194), a broker registered with Spartan Capital Securities, has been the subject of a FINRA investigation, according to his BrokerCheck record, accessed on March 30, 2025. Keep reading for more details. 

FINRA Investigation

On February 18, 2025, FINRA made a preliminary determination to recommend disciplinary action against John Stapleton, alleging that he engaged in unsuitable and excessive trading.

FINRA alleged that he violated FINRA Rules 2111, 2020, and 2010, as well as Regulation Best Interest and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

FINRA Rule 2010

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

FINRA Rule 2020

FINRA Rule 2020 prohibits the use of manipulative, deceptive, or otherwise fraudulent tactics to influence the purchase and sale of securities. Misrepresenting or omitting information about an investment’s risks, costs, or other features violates this rule.

FINRA Rule 2111

“Unsuitability” is a term used to describe inappropriate recommendations and trades that are inconsistent with the customer’s goals and investment profile. FINRA Rule 2111 requires that a broker recommend investments that suit a customer’s investment profile, which describes their age, tax status, investing experience, and other characteristics.

Trades must also be quantitatively suitable. Each trade comes with a transaction fee, so excessive trading will result in excessive fees for the investor.

If an investor suffers financial losses as a result of an unsuitable recommendation, the broker’s firm may be liable for such losses. Investors who rely on brokers for recommendations may be able to recover their losses through FINRA arbitration.

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.

Securities Exchange Act of 1934

Section 10(b) of the Securities Exchange Act of 1934 bans manipulative, deceptive, and otherwise fraudulent activities relating to the securities business. Rule 10b-5 specifically prohibits false statements and omissions of fact that mislead investors.

Investor Allegations

On July 16, 2024, John Stapleton was named in allegations of fraud, negligent failure to supervise, misrepresentation and omissions, and violation of the suitability rule. This pending dispute seeks $375,000 in damages.

FINRA Rule 3110

FINRA Rule 3110 requires that firms establish systems of supervision over their employees in order to detect and prevent violations of securities regulations. Among other things, firms must appoint supervisors and ensure that they have adequate training or experience.

Bankruptcy

On January 4, 2024, John Stapleton discharged a bankruptcy.

Civil Lien

On February 6, 2017, John Stapleton was the subject of a $1,372 civil lien.

Tax Liens

From 2017-2019, John Stapleton incurred a total of $9,370.71 in tax liens.

Background Information

John Stapleton has passed the following exams:

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

He is a registered broker in 18 states and the District of Columbia.

Besides Spartan Capital Securities, John Stapleton has also worked with the following firms: 

• Craig Scott Capital (CRD#:155924)
• Rockwell Global Capital (CRD#:142485)
• JHS Capital Advisors (CRD#:112097)
• Great Eastern Securities (CRD#:2061)
• Gunnallen Financial  (CRD#:17609)
• LH Ross & Company (CRD#:37920)
• Continental Broker-Dealer Corp (CRD#:14048)

Kurta Law Can Help

If you have worked with John Stapleton and have concerns about your investments, don’t hesitate to contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and 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.