FINRA Suspends, Fines 2 NY Brokers Over Reg BI Infractions
The Financial Industry Regulatory Authority has suspended and fined two New York-based brokers for violating the Securities and Exchange Commission’s Regulation Best Interest.
According to the orders, both brokers, Todd Anthony Cirella and Edward Scott Short, were employed by Laidlaw & Co., and recommended a series of trading in accounts that was excessive, unsuitable and not in customers’ best interest.
FINRA levied its first Reg BI-related fine last October.
According to FINRA, between June 2020 and January 2021, Cirella recommended 46 transactions in a 60-year-old customer’s account.
During this period, the trading in the customer’s account generated $27,566 in commissions and resulted in approximately $12,000 in trading losses, an annualized cost-to-equity ratio of 37.65%, and an annualized turnover rate of 20.39, FINRA’s order against Cirella states.
“The high cost-to-equity ratio meant the customer’s account would have to grow by more than 37% annually just to break even, making it very difficult for the customer to realize a profit,” FINRA said.
Cirella was suspended for three months and was ordered to pay a $5,000 fine and $27,566 in restitution.
