Michael Molinaro Subject of FINRA Suspension Following Excessive Trading Allegations
Michael Molinaro (CRD #: 2358346), a broker registered with Network 1 Financial Securities, is the subject of a FINRA suspension. This disclosure appears on his BrokerCheck record, accessed on October 31, 2023. Keep reading if you have questions about his alleged conduct.
On August 31, 2023, Michael Molinaro and Network 1 consented to FINRA’s findings that they did not enforce written supervisory procedures (WSPs) reasonably designed to achieve compliance with FINRA Rule 2111 as it pertains to excessive trading.
Allegedly, the WSPs did not identify what cost-to-equity ratio or turnover rate would suggest excessive trading. They also allegedly did not provide reasonable guidance about what steps to take after identifying an excessively traded account.
The firm and Michael Molinaro allegedly did not identify and respond to red flags of excessive trading. As designated principal, it was his responsibility to determine what actions the firm should take upon identifying red flags. He allegedly did not take reasonable steps, such as restricting the commissions that representatives could charge accounts, until later. Allegedly, certain representatives continued charging high commissions even after the firm had noticed excessive trading.
The excessive trading allegedly resulted in customers paying more than $533,500 in commissions and trading costs.
As part of the terms of the AWC, Michael Molinaro consented to a three-month suspension and a $5,000 fine.
You can read a copy of the AWC here.
FINRA Rule 2111, a.k.a. The Suitability Rule, requires brokers to tailor their investment recommendations to suit investors’ needs. Trades must be quantitatively suitable, meaning the number of trades must suit an investor’s needs. Each trade comes with a transaction fee, so too many transactions will result in excessive fees for the investor. Excessive trading is also known as “churning.”
FINRA Rule 3110
FINRA Rule 3110 requires that firms establish systems of supervision to maintain their compliance with securities regulations. This includes appointing supervisors and providing them with Written Supervisory Procedures (WSPs).
Two investor disputes, one from 2022 and another from 2021, allege that Michael Molinaro engaged in unauthorized trading, among other security regulation violations. The investors are collectively seeking $1,430,000.
Michael Molinaro has passed the following exams:
- Series 65 Uniform Investment Adviser Law Examination
- Series 63 Uniform Securities Agent State Law Examination
- Series 79TO Investment Banking Registered Representative Examination
- Series 99TO Operations Professional Examination
- Series 52TO Municipal Securities Representative Examination
- SIE – Securities Industry Essentials Examination
- Series 7 General Securities Representative Examination
- Series 14 Compliance Officer Examination
- Series 4 Registered Options Principal Examination
- Series 53 Municipal Securities Principal Examination
- Series 10 General Securities Sales Supervisor – General Module Examination
- Series 9 General Securities Sales Supervisor – Options Module Examination
- Series 24 General Securities Principal Examination
He is a registered broker in Florida and New York.
Michael Molinaro has registered with the following firms:
- Network 1 Financial Securities (CRD #: 13577)
- Columbus Advisory Group (CRD #: 126331)
- EJ Sterling (CRD #: 16569)
- Charles Vista (CRD #: 132650)
- John Thomas Financial (CRD #: 40982)
- Charles Vista (CRD #: 132650)
- Maxim Group (CRD #: 120708)
- S.W. Bach & Company (CRD #: 43522)
- Ladenburg Thalmann & Co. (CRD #: 505)
- Ladenburg Capital Management (CRD #: 14623)
- GKN Securities Corp. (CRD #: 19415)
Kurta Law Can Help
If you worked with Michael Molinaro and have concerns about your investments, please contact us today at 877-600-0098 or email@example.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.