- July 23, 2021
- Joseph Stone Capital
Joseph Ambrosole (CRD#: 5732488) was a previously registered Broker at Joseph Stone Capital, LLC in New York, NY. He entered the securities industry in 2011 and previously worked for Alexander Capital, L.P.; Meyers Associates, L.P.; Joseph Stone Capital, LLC; Global Arena Capital Corp.; Laidlaw & Company (UK) LTD; and Obsidian Financial Group, LLC.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in June 2021, a regulatory action initiated by the State of Maryland, Office of the Attorney General, Securities Division is pending against Joseph Ambrosole. The sanction states, “On June 17, 2021, the Maryland Securities Commissioner filed an Order to Show Cause directing the broker to show cause why an order should not issue preventing the broker from engaging in the activities of an agent in the state. The Maryland Securities Commissioner also issued an order of summary suspension while the proceeding is pending. The basis for the State action are prior regulatory disclosures unrelated to any activities in the state of Maryland.”
In addition, Joseph Ambrosole has been the subject of two customer complaints, including the following:
● April 2021–”Without admitting or denying the findings, Ambrosole consented to the sanctions and to the entry of findings that he excessively and unsuitably traded the accounts of two customers. The findings stated that the first account belonged to an elderly customer who began to sustain permanent, progressive, neurological and cognitive impairments. This customer’s account had an average monthly equity of approximately $300,000 and Ambrosole recommended and executed 157 trades, which caused the customer to pay more than $126,000 in commissions and other trading costs. Ambrosole’s recommended trades resulted in an annualized cost-to-equity ratio of approximately 20 percent, which means the customer’s account would have had to grow by more than 20 precent annually just to break even. The second account belonged jointly with the first and had an average monthly equity of approximately $70,000. Ambrosole recommended and executed 40 trades in this account which caused the customers to pay more than $20,400 in commissions and other trading costs. Ambrosole’s recommended trades resulted in an annualized cost-to-equity ratio of approximately 35 percent in the joint account. The customers relied on Ambrosole’s advice and accepted his recommendations. Collectively, Ambrosole’s recommendations caused the customers to pay $147,031.50 in commissions and other trading costs.” Joseph Ambrosole was fined $5,000 by FINRA, ordered to pay restitution of $147,031.50, and suspended from associating with a member firm in all capacities for six months, beginning on May 3, 2021 and ending on November 2, 2021.
For a copy of the FINRA disciplinary action, click here.
● March 2021–”Ambrosole engaged in heavy unsuitable trading which resulted in high commissions for himself and losses to his elderly and ill client of at least $175,000.” The New Hampshire Bureau of Securities Regulation sanctioned Joseph Ambrosole with a cease and desist order, a fine of $130,000, and an order to pay restitution of $175,000.
● August 2018–”COMMON LAW FRAUD, BREACH OF FIDUCIARY DUTY, NEGLIGENCE (GROSS NEGLIGENCE), BREACH OF CONTRACT.” The customer dispute was settled for $10,000.
● March 2018–”CHURNING, UNSUITABILITY, OVERCONCENTRATION.” The customer dispute was settled for $54,900.
● February 2017–A tax judgment/lien was levied against Joseph Ambrosole in the amount of $57,199.
● February 2017–”Without admitting or denying the findings, Ambrosole consented to the sanctions and to the entry of findings that he executed five unauthorized trades in the account of a customer. The findings stated that Ambrosole sold four securities owned by the customer and used the proceeds from those sales to purchase a UIT on behalf of the customer, all without the customer’s authorization. Ambrosole’s unauthorized trading resulted in $645.97 in losses in the customer’s account.” FINRA sanctioned Joseph Ambrosole with a fine of $5,000, restitution of $645.97, and a one-month suspension from associating with a member firm in any capacity, from February 21 to March 20, 2017.
For details of the disciplinary action, click here.
● August 2016–”Respondent Ambrosole failed to respond to FINRA request for information.” FINRA sanctioned Joseph Ambrosole with a suspension from associating with a member firm in any capacity from September 9-November 9, 2016.
For a copy of Joseph Ambrosole’s FINRA BrokerCheck, click here
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 agee, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.
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