Former Joseph Stone Capital Broker Sebastian Wyczawski Sanctioned by FINRA After Allegations of Excessive and Unsuitable Trading Leading to Investment Loss
Sebastian Wyczawski (CRD#: 2835135) is a registered Broker at VCS Venture Securities in Mineola, NY.
He entered the securities industry in 1998 and previously worked for Joseph Stone Capital LLC; Cape Securities, Inc.; Liberty Partners Financial Services, LLC; Milestone Financial Services, Inc; and Seaboard Securities, Inc.
Current And Past Allegations Of Conduct Leading To Investment Loss
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in November 2021, FINRA sanctioned Sebastian Wyczawski with a civil/administrative fine of $5,000, restitution of $21,644, and a 5-month suspension beginning December 6, 2021 and ending May 5, 2021. He is also required to attend and satisfactorily complete a minimum number of hours of continuing education about suitability obligations. The FINRA sanction states, “Without admitting or denying the findings, Wyczawski consented to the sanctions and to the entry of findings that he engaged in excessive and unsuitable trading, including the use of margin, in customers’ accounts. The findings stated that although one customer had an average month-end equity of approximately $51,340, Wyczawski recommended trades with a total principal value of more than $528,759 in the customer’s account, which resulted in an annualized turnover rate of more than 17. Collectively, the trades that Wyczawski recommended caused the customer to pay $10,397 in commissions, trading costs and margin interest, which resulted in an annualized cost-to-equity ratio in excess of 34 percent – meaning that the customer’s account would have had to grow by more than 34 percent annually just to break even. In addition, Wyczawski recommended trades with a total principal value of more than $300,524 in a second customer’s account that had an average month-end equity of approximately $14,831. This resulted in an annualized turnover rate of more than 17. Collectively, the trades Wyczawski recommended in the second customer’s account caused the customer to pay $11,247 in commissions, trading costs and margin interest, which resulted in an annualized cost-to-equity ratio in excess of 65 percent.”
For a copy of the FINRA sanction, click here.
In addition, Sebastian Wyczawski has been the subject of 2 customer complaints, including the following:
- June 2018–”COMMON LAW FRAUD; BREACH OF FIDUCIARY DUTY; NEGLIGENCE; BREACH OF CONTRACT; UNSUITABILITY; OVERCONCENTRATION.” The customer dispute was settled for $17,500.
- March 2004–”UNAUTHORIZED TRANSACTIONS.” The customer dispute was settled for $37,000.
For a copy of Sebastian Wyczawski’s FINRA BrokerCheck, click here.
We Help Investors Recover Investment Losses
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.
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