FINRA Suspends Miguel Murillo for Alleged Excessive Trading

Miguel Murillo (CRD #: 4875997), a broker registered with Joseph Stone Capital, has been suspended by FINRA, according to his BrokerCheck record, accessed on October 21, 2022. Keep reading if you have questions about his conduct as a broker.

FINRA Suspension

On August 31, 2022, Miguel Murillo consented to the entry of findings that he allegedly traded excessively and unsuitably in five client accounts between January 2015 and September 2019.

According to a Letter of Acceptance, Waiver & Consent (AWC), these clients allegedly relied on Miguel Murillo for his advice and accepted his recommendations, and paid a total of $101,508.10 in trading costs and commissions as a result of these trades.

Cost-to-equity ratio and turnover rate in an account are two factors used to identify excessive trading. A cost-to-equity ratio over 20% and a turnover rate of 6 or higher are considered signs of excessive trading.

The AWC alleges that Miguel Murillo caused the following to occur:

• Customer A: 60 trades recommended between September 2016 and December 2018, with a total principal value of over $800,000. Average monthly equity was less than $25,000, but these trades cost the client over $17,000 in commissions/trading costs. Annualized cost-to-equity ratio of approximately 30%.
• Customer B: 35 trades recommended between January 2017 and September 2019. Average monthly equity was approximately $13,000, but these trades cost the client over $12,000 in commissions/trading costs. Annualized cost-to-equity ratio of more than 38%.
• Customer C: 100 trades recommended between January 2015 and September 2018. Average monthly equity was approximately $63,000, but these trades cost the client over $39,000 in commissions/trading costs. Annualized cost-to-equity ratio of more than 25%.
• Customer D: More than 35 trades recommended between January 2015 and January 2016. Average monthly equity was approximately $29,000, but these trades cost the client more than $15,000 in commissions/trading costs. Annualized cost-to-equity ratio of over 47%.
• Customer E: More than 45 trades recommended between January and October 2017. Average monthly equity was approximately $11,000, but these trades cost the client over $17,000 in commissions/trading costs. Annualized cost-to-equity ratio of more than 58%.

The AWC concludes that Miguel Murillo’s alleged misconduct violated FINRA Rules 2111 and 2010.

FINRA Rule 2111

FINRA Rule 2111 requires brokers to recommend securities that sufficiently suit an investor’s financial goals. Brokers must consult the investor’s profile, which contains information about their risk tolerance, age, and tax status.

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

FINRA Rule 2010

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

Sanctions

Miguel Murillo consented to the following sanctions:

• $5,000 fine
• 8-month suspension

His suspension began on September 19, 2022, and will end on May 18, 2023.

You can read a copy of the AWC here.

Tax Lien

On February 20, 2020, Miguel Murillo was subject to a tax lien of $41,502.15.

Investor Dispute

On September 19, 2017, an investor filed a dispute alleging that Miguel Murillo engaged in fraud, executed excessive and unauthorized transactions, and committed a violation related to unsuitable investments. The client sought $800,000 in damages and received a settlement of $250,000.

FINRA Rule 3260

Unauthorized trading violates FINRA Rule 3260, which limits brokers to exercising their trading discretion in pre-authorized discretionary accounts.

Background Information

Miguel Murillo has passed the following exams:

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

Miguel Murillo is a registered broker in 19 states and Puerto Rico.

He has also worked for the following firms:

• Salomon Whitney Financial (CRD#:145012)
• Cape Securities (CRD#:7072)
• Aura Financial Services (CRD#:42822)
• Westpark Capital (CRD#:39914)
• National Securities Corporation (CRD#:7569)

Kurta Law Can Help

If you worked with Miguel Murillo 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.