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Financial Advisor Joseph Lianzo, SW Financial, Suspended by FINRA After Allegations of Excessive Trading

Joseph Lianzo (CRD#: 4516842) is a registered Broker at SW Financial in Melville, NY. He entered the securities industry in 2002 and previously worked for Arrive Capital Markets; Laidlaw & Company (UK) Ltd.; Cape Securities, Inc.; Salomon Whitney LLC; J.P. Turner & Company, LLC; New Castle Financial Group, Inc.; Newbridge Securities Corporation; Harrison Securities, Inc.; and Milestone Financial Services, Inc.

 

According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in August 2021, FINRA sanctioned Joseph Lianzo, suspending him from all capacities for a period of eight months, beginning on September 20, 2021 and ending on May 19, 2022. The FINRA sanction states, “Without admitting or denying the findings, Lianzo consented to the sanction and to the entry of findings that he excessively traded customer accounts. The findings stated that Lianzo recommended the quantitatively unsuitable trading in the accounts for the customers and they routinely followed his recommendations. As a result, Lianzo exercised de facto control over the customer accounts. Lianzo’s trading of the accounts resulted in high turnover rates and cost-to-equity ratios as well as significant losses. Specifically, the customer accounts incurred losses of $293,308 and the customers paid $127,506 in commissions. The findings also stated that Lianzo placed trades in customer accounts without their prior authorization, knowledge or consent.”

 

For a copy of the FINRA sanction, click here.

 

In addition, Joseph Lianzo has been the subject of two customer complaints, including the following:

 

  • September 2018–A tax judgment/lien was placed against Joseph Lianzo in the amount of $11,499.
  • April 2018–”Churning, negligence, unsuitability, unauthorized trading, breach of contract.” The customer dispute was settled for $14,999.
  • March 2017–A tax judgment/lien was placed against Joseph Lianzo in the amount of $9,855.
  • November 2016–A tax judgment/lien was placed against Joseph Lianzo in the amount of $46,890.
  • February 2014–”CLIENT ALLEGES CHURNING, NEGLIGENCE, BREACH OF CONTRACT, UNAUTHORIZED TRANSACTIONS, FAILURE TO FOLLOW INSTRUCTIONS, MARGIN FRAUD, MISREPRESENTATION AND UNSUITABLE RECOMMENDATIONS.” The customer dispute was settled for $100,000.

 

For a copy of Joseph Lianzo’s FINRA BrokerCheck, click here.

Excessive trading often occurs when a Financial Advisor puts his or her interests ahead of the clients and makes transactions solely for the purpose of generating commissions. Financial Advisors have a regulatory duty to recommend suitable investment strategies. One of the components of the suitability analysis is quantitative suitability.

Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation. Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at mwolper@wolperlawfirm.com.

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