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Joseph Giordano is the Subject of a FINRA Fine and Suspension 

Jan 19, 2022 Failure to Supervise

Joseph Giordano (CRD #: 2278341), a broker registered with Acceptus Capital and  Aegis Capital, is the subject of a FINRA fine and suspension, according to his BrokerCheck record, accessed on December 27, 2021. 

Churning Allegations 

FINRA alleges that Joseph Giordano did not fulfill his supervisory duties while employed as an Aegis supervisor and failed to catch signs of excessive trading.  Excessive trading allegedly resulted in cumulative investor losses of $4 million. 

What is Excessive Trading? 

Churning is another term for excessive trading, which occurs when brokers execute trades simply for the sake of generating commissions for themselves, without any financial benefit for their investors. It is prohibited under FINRA Rule 2111, under "quantitative suitability." This means that the number of trades, as well as the type of trades, must fit the customer’s needs.  

The alleged trading of the accounts by Aegis Capital representatives resulted in high turnover rates and cost-to-equity ratios.  

  • The turnover rate represents the number of times that a portfolio of securities is exchanged for another portfolio of securities.  
  • The cost-to-equity ratio measures the amount an account has to appreciate just to cover the commissions and other expenses.  

While Joseph Giordano served as an Aegis supervisor, Aegis representatives allegedly engaged in excessive and. unsuitable trading in at least 23 customer accounts, generating annualized turnover rates ranging from 4.2 to 96.3, annualized cost-to-equity ratios ranging from 21.3% to 164.6%. For context, FINRA has stated that a turnover rate of six and an annualized cost-to-equity ratio above 20% indicates excessive trading.  

Sanctions 

As part of the terms of the AWC, Joseph Giordano consented to 

  1.  Six-month suspension  
  2. $10,000 fine.  
  3. Satisfactorily complete 20 hours of continuing education concerning supervisory responsibilities.  

You can read a copy of the AWC here

Second FINRA Allegation

According to a disclosure dated October 11, 2007, Joseph Giordano consented to the findings that he failed to supervise. As a result of his failure to supervise, FINRA alleges that a GunnAllen representative executed penny stock trades. 

As part of the terms of the AWC, Joseph Giordano consented to the following:  

  1. 10-day suspension  
  2. $7,500 fine. 

You can read a copy of the AWC here. 

What is FINRA’s Failure to Supervise Rule? 

FINRA’s rules guide the conduct of its members, and these rules include requirements that firms supervise their brokers and financial advisers. The rule addressing supervision is FINRA Rule 3110.  

FINRA 3110 requires firms to maintain a supervisory system reasonably designed to achieve compliance with FINRA rules. It also requires that the firm designate a registered principle whose job it is to carry out supervisory responsibilities. The firm must make reasonable efforts to determine that all supervisory personnel are qualified, either by experience or training. 

Background Information 

Joseph Giordano has passed the following exams: 

  • Series 63 - Uniform Securities Agent State Law Examination 
  • SIE - Securities Industry Essentials Examination 
  • Series 7 - General Securities Representative Examination 
  • Series 62 - Corporate Securities Limited Representative Examination 
  • Series 4 - Registered Options Principal Examination 
  • Series 24 - General Securities Principal Examination 

Joseph Giordano is a registered broker in five states. 

He has also worked with the following firms:  

  • Gunnallen Financial (CRD#:17609) 
  • LH Ross & Company  (CRD#:37920) 
  • Citigroup Global Markets (CRD#:7059) 
  • Lumiere Securities (CRD#:13414) 
  • Taj Global Equities (CRD#:31768) 
  • Sovereign Equity Management Corp. (CRD#:20016) 
  • A. T. Brod & Co (CRD#:1319) 
  • Camelot Investment Corp. (CRD#:21925) 

Kurta Law Can Help 

If you worked with Joseph Giordano 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 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.