Joseph Audia Suspended By FINRA For Alleged Failure To Supervise
Joseph Audia (CRD#: 2909761) is a registered Broker at VCS Venture Securities in Hauppauge, NY.
He entered the securities industry in 1997 and previously worked for Joseph Stone Capital, LLC; First Midwest Securities, Inc.; American Capital Partners, LLC; Milestone Financial Services, Inc.; Joseph Gunnar & Co., LLC; Kedem Capital Corporation; and Foster Jeffries Securities, LLC.
Current And Past Allegations Of Conduct Leading To Investment Loss
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in December 2021, FINRA sanctioned Joseph Audia, levying a civil/administrative penalty of $5,000 and suspending him from any principal capacity for two months beginning January 18, 2022, and ending March 17, 2022. The FINRA sanction states, “Without admitting or denying the findings, Audia consented to the sanctions and to the entry of findings that he failed to reasonably supervise a registered representative, who excessively and unsuitably traded certain customer accounts. The findings stated that Audia was provided with active account reports for certain customer accounts that included multiple red flags indicating excessive trading, including high cost-to-equity ratios and high turnover rates in those customer accounts. Audia did not reasonably investigate those red flags or otherwise take appropriate action to reduce the cost to equity ratios and turnover rates in those accounts. The active account reports also identified commission restrictions, or limits on future commissions charged to a customer, that the member firm imposed on accounts that it had identified as active accounts. Audia had responsibility for reviewing the reports and enforcing the commission restrictions. On certain occasions, Audia failed to enforce commission restrictions imposed on the representative by the firm and reflected on the active account reports that he received.”
For a copy of the FINRA sanction, click here.
In addition, Joseph Audia has been the subject of # customer complaints, including # that remain pending, including the following:
- July 2009 – “CLIENTS ALLEGED UNAUTHORIZED TRADING, SUITABILITY AND CHURNING BETWEEN MAY 2005 AND JULY 2006.” The customer dispute was settled for $5,000.
- January 2006 – “ALLEGED NEGLIGIENCE, USE OF MARGIN,SUITABILTY, UNAUTHRIZED TRADES,CHURNING.” The customer dispute was settled for $24,000.
- February 2002 – “FAILURE TO FOLLOW INSTRUCTIONS. THIS INFORMATION IS TAKEN FROM THE 3070 FILING OF THE FIRM BUT NOT PUT ON THE U-5 BY FIRM.” The customer dispute was denied.
For a copy of Joseph Audia’s FINRA BrokerCheck, click here.
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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.
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