Former Private Client Services Broker, Michael Iannarino, Barred By FINRA, For Allegedly Selling Unregistered Promissory Notes To Customers
Michael Iannarino (CRD #1258453) was a Financial Advisor at Private Client Services in Columbus, Ohio. Michael Iannarino has been in the securities industry since 1984 and previously worked at BCG Securities and Stifel Nicolaus.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on June 30, 2020, Michael Iannarino was sanctioned by FINRA, barring him from the securities industry for allegedly selling unregistered promissory notes. According to the FINRA sanction:
“Without admitting or denying the findings, Iannarino consented to the sanction and to the entry of findings that he failed to provide documents and information requested by FINRA during its investigation of his potential recommendation and sale of promissory notes to individuals. The findings stated that Iannarino provided partial but incomplete responses to FINRA’s initial requests. Iannarino’s partial responses did not substantially comply with FINRA’s requests and the information and documents were material to FINRA’s investigation. Subsequently, Iannarino refused to produce any additional information and documents.”
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2020065575901%20Michael%20J.%20Iannarino%20CRD%201258453%20AWC%20va.pdf
In addition, Michael Iannarino has been the subject of four customer complaint disclosures, alleging sales practice violations during his career. Among the complaints allege the following:
• February 2020—”The Claimants allege the representative (Michael Iannarino) recommended an investment into an unregistered security through the use of promissory notes which he misrepresented as a safe low-risk investment with a specified or high return.” Alleged damages are $140,000 and the matter remains pending.
• February 2009—”OHIO RESIDENT SAID THAT TRADES DONE IN A DISCRETIONARY ACCOUNT WERE NOT AUTHORIZED. CLAIMS LOSES OF $109,456.38.” Alleged damages were $109,000 and the complaint was denied.
• August 2001—”CLIENT COMPLIANED THAT SELL INSTRUCTIONS WERE NOT FOLLOWED ON 8/24/01. CLAIMED DAMAGES OF $10,800.” The matter was settled for $10,800.
• May 1999—”CUSTOMER’S REPRESENTATIVE ALLEGES THAT THE TERMS OF A MANUALIFE FINANCIAL “VANISHING PREMIUM” LIFE INSURANCE POLICY PURCHASED THROUGH MERRILL LYNCH WERE MISREPRESENTED TO HER AT THE TIME OF PURCHASE. AMOUNT OF DAMAGES UNSPECIFIED, BUT BELIEVED TO BE IN EXCESS OF $5,000.” The complaint was denied.
Michael Iannarino was also terminated from Stifel Nicolaus for allegedly exercising “time and price discretion” to place block trades away from the firm.
For a copy of Michael Iannarino’s CRD, click https://brokercheck.finra.org/individual/summary/1258453#disclosuresSection
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.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
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.
Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s:
• Other investments
• Financial situation and needs
• Tax status
• Investment objectives
• Time horizon
• Liquidity needs
• Risk tolerance
• Any other information disclosed by the customer
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