FINRA Investigates Rodney Ferruso for Short-term Trading of Mutual Funds
According to public records, FINRA has reportedly barred financial advisor Rodney Ferruso (CRD#: 1457661) from the securities industry. FINRA (The Financial Industry Regulatory Authority) is the self-regulator that oversees brokers and brokerage firms.
According to a Letter of Acceptance Waiver and Consent (AWC), Ferruso reportedly refused to appear for on-the-record testimony requested by FINRA in connection with its investigation. FINRA was reportedly investigating the circumstances described in a Form U5 submitted by his member firm. that stated that it had permitted him to resign after identifying short-term trading of certain mutual funds in his customer accounts.
Short-Term Trading of Mutual Funds
Mutual fund switching or short-term mutual fund trading by a broker can be detrimental to their clients for several reasons:
Frequent switching or trading in and out of mutual funds can lead to higher transaction costs, such as sales charges, redemption fees, and capital gains taxes. These costs can erode the overall returns for the investor. Short-term trading may trigger capital gains taxes, which can reduce the after-tax returns for investors. It’s especially problematic in taxable accounts, as the gains are subject to tax.
Frequent switching can result in the investor missing out on the long-term growth potential of the mutual funds. Timing the market is notoriously difficult, and short-term trading can lead to missed opportunities or selling low and buying high. If a broker engages in excessive trading solely to generate commissions or fees, this can lead to “churning.” Churning is unethical and potentially illegal, and it’s harmful to the client’s financial well-being.
Overall, mutual fund switching or short-term trading by a broker can harm their client by increasing costs, reducing returns, and potentially undermining the client’s long-term financial goals and trust in their financial advisor. It’s essential for brokers to act in the best interests of their clients, follow ethical guidelines, and consider the long-term welfare of the investors they serve.
FINRA BrokerCheck Report – Rodney Ferruso
According to this FINRA BrokerCheck report, Rodney Ferruso was affiliated with the following firms during his career, among others:
11/02/2018 – 08/30/2022, ROYAL ALLIANCE ASSOCIATES, INC. (CRD#:23131), MORGANTOWN, WV,
B, 08/27/1986 – 11/02/2018, SIGNATOR INVESTORS, INC. (CRD#:468), MORGANTOWN, WV
The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.
FINRA BrokerCheck provides investors with detailed information about the professional history, qualifications, and regulatory actions of brokers and brokerage firms. Investors can use the tool to verify whether a broker or brokerage firm is registered with FINRA, as well as to review their employment history, licensing status, and any regulatory actions or complaints filed against them.
If you have suffered losses investing with Rodney Ferruso, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, 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 dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors to recover their fraud losses. For more information, please visit our website, www.whitesecuritieslaw.com.
Tags: broker investigation, Rodney Ferruso, Royal Alliance Last modified: November 1, 2023