FINRA Suspends Broker John Cangialosi after Allegations of Unsuitable Investment Recommendations
According to the Financial Industry Regulatory Authority (FINRA), the regulator reportedly suspended advisor John Sebastian Cangialosi (CRD#: 3273830) after he allegedly engaged in quantitatively unsuitable trading in three customer accounts.
FINRA’s finding stated that Cangialosi allegedly recommended high frequency trading in the accounts, with each customer often holding concentrated positions in one or two securities for short periods of time. Cangialosi’s customers routinely followed his recommendations and, as a result, he purportedly exercised de facto control over the accounts.
Cangialosi’s trading also reportedly resulted in high turnover rates and cost-to-equity ratios as well as significant losses. Cangialosi’s trading in the customers’ accounts was allegedly excessive and unsuitable given the customers’ investment profiles. As a result, the customers reportedly suffered collective realized losses of $405,255, while paying total trading costs of $311,229, including commissions of $292,657.
In additions to the 9-month suspension, Cangialosi was reportedly sanctioned with a $7,500 fine and $271,622.00 in restitution. According to his FINRA Broker profile, Cangialosi has 12 disclosures during his career in the securities industry, including 7 customer complaints, 3 regulatory events, an employment separation and a bankruptcy that was reportedly filed in 2013.
According to FINRA, Cangialosi was reportedly affiliated with the following firms during his career in the industry, among others:
10/2019 – present, SW FINANCIAL CRD#: 145012, NEW YORK, NY
11/04/2016 – 12/10/2019, WORDEN CAPITAL MANAGEMENT LLC (CRD#:148366), New York, NY
08/21/2013 – 11/09/2016, LEGEND SECURITIES, INC. (CRD#:44952), NEW YORK, NY
06/20/2012 – 08/30/2013, JOSEPH GUNNAR & CO. LLC (CRD#:24795), STATEN ISLAND, NY
Potential Lawsuits to Recover Financial Losses
The White Law Group is investigating potential securities claims involving John Cangialosi and the liability his employers may have for failure to properly supervise his activities.
When brokers abuse client accounts or conduct transactions that violate securities laws, such as making unsuitable investment recommendations, the brokerage firm they are working with may be liable for investment losses. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
If you suffered losses investing with John Cangialosi, the attorneys at The White Law Group may be able to help you by filing a FINRA Arbitration claim against his former employers. For a free consultation, with a securities attorney please call (888) 637-5510.
For more information on the firm’s investigations, please see:
Worden Capital Management hit with $1.5M for Excessive Trading
The foregoing information, which is all publicly available, is being provided by The White Law Group.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois.
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