Roberto Birardi Subject of FINRA Fine and Suspension
Roberto Birardi (CRD #: 4737649), a broker registered with Aegis Capital, is the subject of a FINRA suspension and fine, according to his BrokerCheck record, accessed on December 27, 2021.
On November 8, 2021, Roberto Birardi consented to the findings that as one of the designated supervisory principles, he did not respond to multiple red flags identifying potentially excessive and unsuitable trading in customer accounts managed by the Aegis Representatives, including, among others, more than 700 exception reports generated by Aegis’s clearing firm.
From July 2014 through December 2018, the active and frequent trading conducted by the six Aegis Capital representatives and recorded on the daily trade blotters generated annualized turnover rates ranging from 4.2 to 96.3 and annualized cost-to-equity ratios ranging from 21.3% to 164.6%. This allegedly led to cumulative losses of $4 million. For context, FINRA has stated that a turnover rate of six and an annualized cost-to-equity ratio above 20% indicates excessive trading.
You can read a copy of the AWC here.
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.” The number of trades must suit the investor’s financial goals.
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.
As part of the terms of the AWC, Roberto Birardi consented to the following:
- Three-month suspension
- $5,000 fine.
- 20 hours of continuing education concerning supervisory responsibilities.
Failure to Supervise Allegations
On July 28, 2010, an investor filed a dispute against Roberto Birardi. According to the investor, Roberto Birardi allegedly poorly supervised the subject broker who handled the client’s accounts. The damage amount requested was $375,000, however, the case settled for $71,125.
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.
Roberto Birardi 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 24 – General Securities Principal Examination
Roberto Birardi is a registered broker in four states.
Besides Aegis Capital, Roberto Birardi has also worked with Gunnallen Financial (CRD#:17609)
Kurta Law Can Help
If you worked with Roberto Birardi and you have concerns about your investments, please contact us today at 877-600-0098 or firstname.lastname@example.org 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.