Joseph LaScala Allegedly Executed Unauthorized Trades

Joseph LaScala (CRD #: 3070261), a broker registered with Aegis Capital Corporation, is the subject of a pending dispute, according to his BrokerCheck record, accessed on June 1, 2023. If you have questions about his alleged conduct as a broker, keep reading.

Investor Dispute

On March 15, 2023, an investor alleged that Joseph LaScala executed unauthorized trades. This dispute is currently pending.

FINRA Rule 3260

FINRA Rule 3260 prohibits brokers from conducting discretionary trading outside discretionary accounts, approved for discretionary trading in advance by the firm and the client.

FINRA Suspension

On January 24, 2022, Joseph LaScala consented to the entry of findings that he allegedly engaged in excessive, unsuitable, and unauthorized trading in a client’s account between July 2014 and April 2016.

Alleged Excessive Trading

According to a Letter of Acceptance, Waiver & Consent (AWC), Joseph LaScala allegedly engaged in short-term trading in a client’s 401(k) account. He allegedly placed 235 trades during the relevant period, resulting in an annualized cost-to-equity ratio of 29.16% and an annualized turnover rate of 5.8.

For comparison, an annualized cost-to-equity ratio over 20% and turnover rates above six are considered red flags for excessive trading.

The AWC alleged that Joseph LaScala exercised de facto control over this client’s account by deciding which stocks to trade, when to execute trades, and exercising his discretion in executing 139 of these trades.

Joseph LaScala’s short-term trading was allegedly unsuitable for the client’s profile and resulted in $90,720 in trading costs and $116,194 in losses.

Alleged Unauthorized Trading

The AWC alleged that, between January 2015 and April 2016, Joseph LaScala executed 139 discretionary trades with a total principal value of approximately $2 million. He allegedly failed to receive prior written authorization from the client for these trades.

The AWC concludes that these allegations constitute violations of FINRA Rules 2111 and 2010 and NASD Rule 2510(b).

FINRA Rule 2111

FINRA Rule 2111 requires brokers to tailor their investment recommendations to suit investors’ profiles. These profiles contain information about an investor’s tax status, risk tolerance, and other characteristics.

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

FINRA Rule 2010

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

Sanctions

Joseph LaScala consented to the following sanctions:

• $7,500 fine
• 4-month suspension

His suspension ran from February 22, 2022, and June 21, 2022. You can read a copy of the AWC here.

Background Information

Joseph LaScala has passed the following exams:

• Series 65 – Uniform Investment Adviser Law Examination
• Series 63 – Uniform Securities Agent State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 7 – General Securities Representative Examination
• Series 4 – Registered Options Principal Examination
• Series 24 – General Securities Principal Examination

Joseph LaScala is a registered broker in 14 states as well as the District of Columbia and Puerto Rico.

He has also worked for the following firms:

• Paulson Investment Company (CRD#:5670)
• GunnAllen Financial (CRD#:17609)
• Investec Ernst & Company (CRD#:266)
• Royce Investment Group (CRD#:10494)

Kurta Law Can Help

If you worked with Joseph LaScala 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.