Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker, Adam Maggio (CRD # 4177365) was recently suspended from all principal capacities in the securities industry by FINRA’s Department of Enforcement after an investigation into failing to adequately supervise trading in certain customer accounts at Joseph Stone Capital L.L.C. for potentially excessive activity.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Mr. Maggio or Joseph Stone Capital L.L.C.
Registration Background for Adam Maggio
Mr. Maggio first became registered in the securities industry in 2000. He is currently registered with Minneola, NY based VCS Venture Securities (CRD # 127921) and Joseph Stone Capital L.L.C. (CRD # 159744). His prior registrations include First Midwest Securities, Inc. (CRD # 21786) from October 2008 to February 2013, J.P. Turner & Company, L.L.C. (CRD # 43177) from December 2005 to October 2008 and Brundyn Securities, Inc. (CRD # 124493) from August 2004 to December 2005.
FINRA’s Allegations Against Adam Maggio
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated December 10, 2021 Mr. Maggio consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “From January 2015 to June 2020, [Mr.] Maggio failed to reasonably supervise trading in certain customer accounts at Joseph Stone for potentially excessive activity”;
- “[Mr.] Maggio failed to identify certain red flags of excessive trading, and when [Mr.] Maggio was provided notice of those red flags in certain customer accounts, he did not implement appropriate procedures to stop the misconduct”;
- “From January 2015 through November 2017, Joseph Stone’s clearing firm made exception reports available to Joseph Stone through an online portal, to which [Mr.] Maggio and other supervisors had access. Among these exception reports were “active account reports” that flagged accounts with high commission-to-equity ratios.
- “Prior to November 2017, [Mr.] Maggio did not review these reports as a general practice, even though they were uploaded to the portal. Instead, [Mr.] Maggio tried to identify excessively traded accounts using his own manual calculations, which compared the commissions charged in an account to the account’s current value, rather than its average net equity, and which often understated the cost-to-equity ratio”;
- “After [Mr.] Maggio began reviewing relevant exception reports in November 2017, in certain instances he failed to reasonably respond to red flags of excessive trading”; and
- By virtue of his actions, Mr. Maggio violated FINRA Rule 3110 regarding supervision and FINRA Rule 2010, regarding standards of commercial honor and principles of trade.
FINRA Suspends Adam Maggio from All Principal Capacities in the Securities Industry
As a result of such violations and in addition to the above described findings and conclusions, FINRA’s December 10, 2021 AWC also indicates that Mr. Maggio consented to the following sanction(s):
- A five-month suspension from association with any FINRA member in all principal capacities;
- A fine in the amount of $5,000.00; and
- Satisfactorily completing 20 hours of continuing education within 90 days of notice of the AWC.
Adam Maggio Has A History of Securities Industry Customer Complaints
In addition to Adam Maggio being suspended by FINRA from all principal capacities in the securities industry regarding failure to supervise, FINRA BrokerCheck for Mr. Maggio reveals that he has a history of customer complaints and/or customer initiated arbitrations, including but not necessarily limited to the following:
- On April 5, 2010 a customer initiated arbitration was filed naming Mr. Maggio as a respondent regarding alleged actions that occurred while he was associated with J.P. Turner & Company LLC. The customer alleged excessive trading, unsuitability, misrepresentation, excessive commission, negligence, breach of fiduciary duty and fraud. The customer further alleged damages in the amount of $575,000.00. On February 8, 2011 the arbitration was settled in the amount of $43,750.00 with Mr. Maggio being responsible for $21,875.00.
- On April 10, 2009 a customer initiated arbitration was filed naming Mr. Maggio as a respondent regarding alleged actions that occurred while he was associated with J.P. Turner & Company LLC. The customer alleged fraud, misrepresentation, suitability, unauthorized trading and breach of fiduciary duty and fraud. The customer further alleged damages in the amount of $150,000.00. On January 19, 2010 the arbitration was settled in the amount of $14,900.00 with Mr. Maggio being responsible for $5,000.00.
If you or someone you know has or had a brokerage account with Adam Maggio or Joseph Stone Capital L.L.C. and have concerns regarding losses in your investments or possible sales practice violations including fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.