FINRA Suspends Ex-Rep Over Reg BI Violations
Desapio’s trading in the accounts was excessive, unsuitable, and not in the best interest of these three customers given their investment profiles, according to the order.
For instance, in the 71-year-old insurance agent’s account, Desapio recommended 131 transactions, resulting in an annualized turnover rate of 12 and an annualized cost to-equity ratio of 72%. Desapio’s trading in the account generated total trading costs of $27,527, including $19,778 in commissions, and caused $24,454 in realized losses.
On July 27, 2022, Spartan filed a Uniform Termination Notice for Securities Industry Registration terminating Desapio’s registration through the firm. The Form U5 stated that an arbitration had been filed against Desapio alleging “that applicant borrowed money and executed promissory note for funds from customer” and that the applicant “owes Firm $22,992.38.”
In addition, Desapio borrowed $20,000 from one of his customers in September 2019 without Spartan’s prior approval, in violation of FINRA Rules 3240 and 2010.
Although Desapio is no longer registered or associated with a FINRA member firm, he remains subject to FINRA’s jurisdiction.
