FINRA Investigation Recommends Disciplinary Action Against Nigel James, Broker at Joseph Stone Capital, for Excessive and Unsuitable Trading, and Suitability Concerns
Nigel James (CRD#: 4490687) is a registered Broker at Joseph Stone Capital, LLC in Mineola, NY. He entered the securities industry in 2002 and previously worked for First Midwest Securities, Inc.; J.P. Turner & Co., LLC; Brundyn Securities, Inc; LH Ross & Co., Inc.; and Harrison Securities, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in June 2021, FINRA opened Case #20190638216, an investigation into the conduct of Nigel James. FINRA’s description of the investigation states, “On June 25, 2021, FINRA made a preliminary determination to recommend that disciplinary action be brought against Nigel James alleging violation of FINRA Rules 2111 and 2010 in that he excessively traded and exercised quantitative unsuitability; and violation of FINRA Rule 2010 in that he conducted unauthorized trading and unauthorized use of margin.”
In addition, Nigel James has been the subject of five customer complaints, including the following:
● April 2014–”UNSUITABLE TRANSACTIONS BREACH OF CONTRACT FRAUD CHURNING BREACH OF FIDUCIARY DUTY NEGLIGENCE FAILURE TO COMPLY WITH INTERNAL PROCEDURES.” The customer dispute was settled for $88,000.
● January 2013–”CLIENT ALLEGES CHURNING, NEGLIGENCE,BREACH OF CONTRACT, UNAUTHORIZED TRANSACTIONS,FAILURE TO FOLLOW INSTRUCTIONS, MARGIN FRAUD, UNSUITABLE RECOMMENDATIONS, AND MISREPRESENTATION.” Damages of $395,000 were requested. The customer dispute was closed with no action.
● July 2009–”CLIENT ALLEGED UNAUTHORIZED TRADE 7/14/08.” Damages of $51,000 were requested. The customer dispute was closed with no action.
● December 2008–”CLIENT ALLEGED UNAUTHORIZED TRADE ALTHOUGH HE ADMITS TO AUTHORIZING THE PURCHASE. 8/7-8/13/08.” Damages of $7,000 were requested. The customer dispute was denied.
● March 2008–”UNAUTHORIZED TRADE.” The customer dispute was settled for $4,999.99.
For a copy of Nigel James’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 firstname.lastname@example.org.