FINRA suspended financial advisor Christian Frank Lucchetto (CRD No. 4648994, hereinafter “Lucchetto”) from the securities industry for three months and fined him $5,000 based on allegations of excessive trading in customer accounts. According to FINRA, during January 2018 through May 2019, Lucchetto excessively and unsuitably traded a customer’s account, in violation of FINRA Rules 2111 and 2010. The conduct allegedly occurred while Lucchetto was employed at First Standard Financial Co. (“First Standard”) in Red Bank, New Jersey.
In 2019, New Jersey securities regulators revoked the broker-dealer registration of First Standard and froze its assets over findings that the firm received revenues of approximately $28.7 million due to unauthorized, unsuitable and excessive trading. According to New Jersey, the firm, headquartered in Red Bank, N.J., routinely hired agents with a history of customer complaints and regulatory problems. According to New Jersey, First Standard engaged in unsuitable and frequently unauthorized in-and-out trading in bonds and other securities for which active trading is unsuitable in customer accounts. New Jersey also found that the firm’s sales commissions were so high that accounts would have had to generate extraordinary returns simply to break even.
According to FINRA Letter of Acceptance, Waiver, and Consent No. 2020065035201l, accessible here lucchetto awc, between January 2018 and May 2019, Mr. Lucchetto, while employed by First Standard, Lucchetto excessively and unsuitably traded a customer’s account.
In a lawsuit New Jersey has alleged that First Standard was aware of the conduct of its agents in engaging in excessive trading activity in customer accounts, as evidenced by numerous customer complaints and customer initiated arbitration filings, daily trade reports, exception reports, and regulatory inquiries. Also according to New Jersey’s lawsuit, First Standard uniformly employed an active trading strategy that maximized commissions for First Standard without regard to its suitability to their customers. Customer trading was characterized by very high turnover ratios as well as cost-to-equity ratios ranging from approximately 10% to 25% in some cases.
The firm later closed its doors and declared bankruptcy, leaving First Standard an unlikely source of financial recovery. However it is possible that, depending on the individual facts of a case and when the issues arose, a customer who believes he or she was subject to an unsuitable trading recommendation or other violations could have legal recourse against a registered representative’s former employers, supervisors, or third parties. These types of claims are typically brought via a process known as arbitration before FINRA, which is explained elsewhere on our firm’s website. https://www.investorlawyers.net/faqs.html
The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors in disputes concerning churning and excessive trading and other stockbroker misconduct. Investors may contact us via the contact form on this website, by telephone at (866) 966-9598, or by e-mail at firstname.lastname@example.org for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, New Jersey, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).
This article is intended as ATTORNEY ADVERTISING and is not an official notice.