- February 22, 2023
- Arive Capital Markets
Lon Faccini, Jr. (CRD#: 2736849) is a previously registered Broker.
He entered the securities industry in 1996 and previously worked for Arive Capital Markets; Cape Securities, Inc.; Liberty Partners Financial Services, LLC; J.W. Cole Financial, Inc.; J.P. Turner & Co., LLC; LH Ross & Co., Inc.; Continental Broker-Dealer Corp.; Gunnallen Financial, Inc.; Seaboard Securities, Inc.; H.J. Meyers & Co. Inc.; and Investors Associates, 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 February 2023, FINRA sanctioned Lon Faccini, Jr. with a civil and administrative penalty of $5,000, restitution of $18,770, and suspension from all capacities for six months beginning February 21, 2023 and ending August 20, 2023. The FINRA sanction states, “Without admitting or denying the findings, Faccini consented to the sanctions and to the entry of findings that he engaged in excessive and unsuitable trading, including using margin, in customers’ accounts. The findings stated that Faccini recommended that the customers place trades in their accounts, most of which were executed using margin for one of the customers and all were executed using margin for the other customer. Both customers routinely accepted Faccini’s recommendations. Although the customer’s account had an average month-end equity of approximately $116,900 for 19 months, Faccini recommended purchases with a total principal value of approximately $2,410,300, which resulted in an annualized turnover rate in the account of just over 13. As a result of Faccini’s unsuitable recommendations, that customer had a loss of approximately $36,700. Collectively, the trades that Faccini recommended caused that customer to pay approximately $55,389 in commissions and fees and another $12,997 in margin interest for a total of approximately $68,385. In addition, although the other customer’s account had an average month-end equity of approximately $26,856 for 16 months, Faccini recommended purchases with a total principal value of approximately $522,438, which resulted in an annualized turnover rate in the account of 14.59. As a result of Faccini’s unsuitable recommendations, the other customer had a loss of approximately $17,395. Collectively, the trades that Faccini recommended caused the other customer to pay approximately $16,074 in commissions and fees and another $2,696 in margin interest for a total of approximately $18,770.”
For a copy of the FINRA sanction, click here.
In addition, Lon Faccini, Jr. has been the subject of nine customer complaints, including two that remain pending, including the following:
- November 2022 — “Suitability, Churning.” Damages of $453,406.47 are requested. The customer dispute is pending.
- September 2020 — “Negligence and churning.” The customer dispute was settled for $36,000.
- August 2019 — “Excessive Trading, Unsuitability, Churning.” The customer dispute was settled by arbitration for $115,000.
- September 2018 — “Misrepresentation and suitability.” Damages of $106,000 are sought. The customer dispute is pending.
- August 2016 — “Suitability.” The customer dispute was settled for $9,000.
- June 2015 — “Breach of fiduciary duty, common law fraud, negligence/negligent misrepresentation, omissions, breach of contract, restitution, churning, and unsuitability.” The customer dispute was resolved through arbitration.
- November 2013 — “CLIENT CLAIMS THAT REP HARASSED HIM FROM FEB. OF 2009 UNTIL HE OPENED AN ACCOUNT WITH HIM AND THEN PROCEEDED TO CHARGE AN EXCESS OF $40,000 IN COMMISSIONS.” The customer dispute was settled for $37,500.
- October 2010 — “CUSTOMER STATES THAT HE REQUESTED THAT STOP LOSS ORDERS BE PLACED ON 11 LISTED STOCKS. THE BROKER STATES HE RECEIVED NO SUCH INSTRUCTIONS FROM THE CUSTOMER.” The customer dispute was settled for $123,434.97.
- August 2008 — “CUSTOMER STATES THAT HE REQUESTED THAT STOP LOSS ORDERS BE PLACED ON THE ABOVE LISTED 11 STOCKS. THE BROKER STATES HE RECEIVED NO SUCH INSTRUCTIONS FROM THE CUSTOMER. THE FIRM IS CURRENTLY COMMUNICATING WITH THE CLIENTS ATTORNEY.” The customer dispute was denied.
For a copy of Lon Faccini Jr.’s FINRA BrokerCheck, click here.
We Help Investors Recover Investment Losses
Excessive trading or churning 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.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at email@example.com.