Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker, John Sebastian Cangialosi (CRD # 3273830) was recently suspended from the securities industry by the FINRA Department of Enforcement for excessively trading (churning) three customer accounts.
The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Mr. Cangialosi.
Registration Background for John Cangialosi
Mr. Cangialosi first became registered in the securities industry in 2001. He is currently registered with Melville, NY based SW Financial (CRD # 145012). His prior registrations include Worden Capital Management LLC (CRD # 148366) from November 2016 to December 2019, Legend Securities, Inc. (CRD # 44952) from August 2013 to November 2016 and Joseph Gunnar & Co. LLC (CRD # 24795) from June 2012 to August 2013.
FINRA’s Allegations Against John Cangialosi
According to FINRA Letter of Acceptance, Waiver and Consent (AWC) dated August 12, 2021, Mr. Cangialosi consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “From October 2014 through December 2018, [Mr.] Cangialosi engaged in quantitatively unsuitable trading in three customer account”;
- “[Mr.] Cangialosi recommended high frequency trading in the three customer accounts with each customer often holding concentrated positions in one or two securities for short periods of time”;
- “[Mr.] Cangialosi’s customers routinely followed his recommendations and, as a result, [Mr.] Cangialosi exercised de facto control over the three customers’ accounts”;
- “[Mr.] Cangialosi’s trading in these three customers’ accounts was excessive and unsuitable given the customers’ investment profiles”;
- “As a result of [Mr.] Cangialosi’s excessive trading, the customers suffered collective realized losses of $405,255, while paying total trading costs of $311,229, including commissions of $292,657”; and
- By virtue of his actions, Mr. Cangialosi violated FINRA Rule 2111, regarding suitability and FINRA Rule 2010, regarding standards of commercial honor and principles of trade.
FINRA Sanctions John Cangialosi
As a result of such violations and in addition to the above described findings and conclusions, FINRA’s August 12, 2021 AWC also indicates that Mr. Cangialosi consented to the following sanction(s):
- A nine-month suspension from association with any FINRA member in all capacities;
- A fine in the amount of $7,500.00; and
- Restitution in the amount of $271,622.00.
John Cangialosi Has A History of Securities Industry Customer Complaints
In addition to the August 12, 2021 AWC showing John Cangialosi being suspended from the securities industry by FINRA for excessively trading (churning) customer accounts, FINRA BrokerCheck for John Cangialosi reveals he has a prior history of customer complaints and/or customer initiated arbitrations, including but not necessarily limited to the following:
- On January 8, 2018, a customer-initiated arbitration was filed naming Mr. Cangialosi as a Respondent regarding alleged actions that occurred while he was associated with Legend Securities. The customer alleged churning, unsuitable investments, unauthorized trading, negligence, breach of fiduciary duty and breach of contract. The customer further alleged damages in the amount of $386,279.09. On November 24, 2018 the arbitration was settled in the amount of $30,000.00.
- On November 20, 2015, a customer-initiated arbitration was filed naming Mr. Cangialosi as a Respondent regarding alleged actions that occurred while he was associated with Brookstone Securities, Inc. The customer alleged fraud, negligence, breach of contract, churning, unsuitability and negligent misrepresentation. The customer further alleged damages in the amount of $100,000.00. On May 26, 2016 the arbitration was settled in the amount of $9,999.00.
- On February 10, 2015, a customer-initiated arbitration was filed naming Mr. Cangialosi as a Respondent regarding alleged actions that occurred while he was associated with Legend Securities. The customer alleged breach of contract, fraud, breach of fiduciary duty and negligence. The customer further alleged damages in the amount of $250,000.00. On January 14, 2016 the arbitration was settled in the amount of $50,000.00.
If you or someone you know has or had a brokerage account with John Sebastian Cangialosi and have concerns regarding losses in your investments or possible sales practice violations including fraud, churning or unsuitability, 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.