The White Law Group Reviews the Complaints and Regulatory Actions of Joseph Stone Capital
The White Law Group continues to investigate potential securities lawsuits involving Joseph Stone Capital (CRD#: 159744 / SEC#: 8-69014). The firm, headquartered in Garden City, New York, has eight (8) disclosures on its CRD or FINRA Broker report. It is also reportedly subject to the FINRA 3170 Taping Rule.
Regulatory actions taken against a broker-dealer may include censures, fines, suspensions, and restitution, among others. They can have serious consequences for a broker-dealer’s profile and reputation. The following is a review of FINRA and the SEC’s regulatory actions involving Joseph Stone Capital.
FINRA Taping Rule Violation
April 11, 2025 – Joseph Stone failed to comply with FINRA Rule 3170 (the Taping Rule), which requires certain firms to tape record all telephone conversations between their registered persons and existing and potential customers. Between September 2021 and July 2024, the firm’s special written procedures were not reasonably designed to comply with the Taping Rule. In some instances, the firm failed to record conversations as required. Joseph Stone was censured and fined $35,000 for violations of FINRA Rules 3170 and 2010.
FINRA Complaint: Joseph Stone and Excessive Trading
September 8, 2022 – FINRA censured Joseph Stone Capital, LLC for supervisory failures in connection with suitability requirements involving excessive trading. From January 2015 through June 2020, the firm allegedly failed to respond to red flags of excessive trading in 25 customer accounts, which caused clients to pay more than $1,037,000 in commissions, fees, and margin interest.
In addition to the censure, the firm was ordered to pay restitution of $825,607.59 and implement a heightened supervision plan for five representatives, lasting at least two years.
What is Excessive Trading or Churning?
When a broker excessively trades in a customer’s account primarily to generate commissions rather than to serve the client’s best interests, it may constitute churning. This practice is illegal and unethical, often resulting in unnecessary losses and tax liabilities for investors.
Barred Brokers Associated with Joseph Stone Capital
Several former Joseph Stone brokers have been barred by regulators for misconduct:
- David Martirosian (CRD#: 5261144) – Barred by FINRA in 2021 after multiple disclosures, including customer disputes, regulatory actions, and tax liens.
- Ross Barish (CRD#: 3094364) – Barred by the SEC in 2022 after allegations of excessive trading, misrepresentations, and customer losses.
- Joseph Ambrosole (CRD#: 5732488) – Barred by FINRA in 2022 following multiple disclosures of unsuitable trading, customer disputes, and regulatory sanctions.
- Eugene McAdams (CRD#: 4190211) – Barred by FINRA in 2021 after refusing testimony in an investigation into unsuitable trading.
What is Failure to Supervise?
FINRA Rule 3110 requires firms to establish and maintain supervisory systems to ensure compliance with securities laws and regulations. Written supervisory procedures (WSPs) must identify supervisory responsibilities, frequency of review, and documentation requirements.
Firms that fail to supervise may be liable for customer losses caused by their brokers’ misconduct. In FINRA arbitration, brokerage firms can be held responsible for damages due to negligent supervision.
Class Action Lawsuit vs. Individual FINRA Arbitration
If your losses are significant (generally over $100,000), an individual FINRA arbitration claim is often the better path than joining a class action lawsuit. Class actions are more suitable for groups of investors with smaller, less practical claims.
Filing a Lawsuit for Investment Losses
If you are concerned about your investments with Joseph Stone Capital, the securities attorneys at The White Law Group may be able to help. For a free consultation, please call (888) 637-5510.
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 and Seattle, Washington.
FAQs
How can I check if my broker has a history of complaints?
You can review a broker’s regulatory history using FINRA’s BrokerCheck tool, which provides information on customer complaints, disciplinary actions, and employment history.
What should I do if I suspect churning in my account?
Gather your account statements and trade confirmations, then consult with a securities attorney. An experienced lawyer can review your transactions to determine if churning or other misconduct occurred.
Can I recover if my broker was barred after I invested?
Yes. Even if a broker is barred, investors may still pursue recovery of losses through FINRA arbitration against the brokerage firm that employed the broker at the time of the misconduct.
