First Standard Financial Broker, Frank Venturelli, Suspended Eleven Months By FINRA For Allegedly Engaging In Excessive Trading
Frank Venturelli (CRD # 6403468) was a Financial Advisor at First Standard Financial in Red Bank, New Jersey. Frank Venturelli has been in the securities industry since 2014. After leaving First Standard, Frank Venturelli worked briefly at Arive Capital Markets.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on June 19, 2020, FINRA sanctioned Frank Venturelli, suspending him for a period of eleven (11) months and ordering restitution of $30,000. The basis for the sanction is that Frank Venturelli allegedly engaged in excessive trading in the accounts of customer. According to the FINRA sanction:
“Without admitting or denying the findings, Venturelli consented to the sanctions and to the entry of findings that he engaged in quantitatively unsuitable trading in customers’ accounts. The findings stated that Venturelli recommended the trading in the customers’ accounts, and they followed his recommendations. As a result, Venturelli exercised de facto control over the accounts. Venturelli’s trading of the accounts resulted in high turnover rates and cost-to-equity ratios as well as significant losses. Venturelli’s trading was excessive and unsuitable given the customers’ investment profiles, and it was virtually impossible for any of the customers to earn a profit. As a result of Venturelli’s excessive trading, the customers suffered collective losses of $373,226 and paid $169,803 in commissions and fees.”
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2017052466303%20Frank%20Venturelli%20CRD%206403468%20AWC%20va.pdf.
In addition, Frank Venturelli has one disclosed customer complaint in which the customer alleges “excessive trading and unsuitable trades.” The alleged damages are $50,000 and the matter remains pending.
For a copy of Frank Venturelli’s CRD, click https://brokercheck.finra.org/individual/summary/6403468#disclosuresSection
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.
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