Chistopher Paul Gallo, a stockbroker formerly associated with Joseph Stone Capital L.L.C., based in New York, was sanctioned by Financial Industry Regulatory Authority (FINRA). The regulatory action involved allegations of violations of Regulation Best Interest or Reg. BI, Rule 15l-1(a)(1) of the Securities Exchange Act of 1934. Gallo was accused of the excessive trading of his customer accounts between June 30, 2020, and November 2021, while registered with Spartan Capital Securities LLC. Letter of Acceptance, Waiver, and Consent (AWC) No. 2018056490321.
According to the AWC, Gallo’s trades reportedly generated substantial commissions, caused significant financial losses to two retail customers, and disregarded their best interests, violating Regulation BI and FINRA Rule 2010. The sanctions included a five-month suspension from associating with any FINRA member in all capacities.
The findings showed that Gallo’s recommendations resulted in high turnover rates and cost-to-equity ratios that exceeded acceptable thresholds. One of the affected customers, a 54-year-old retiree with a speculative investment objective, incurred realized losses of $95,393.00 from 45 transactions over a 14-month period. These transactions generated $28,428.00 in commissions and led to an annualized turnover rate of 14 and a cost-to-equity ratio of 64%. A second customer, a 73-year-old senior investor, suffered $109,099.00 in realized losses as a result of 120 transactions recommended by Gallo. This trading activity, spanning the same period, generated $69,553.00 in commissions and produced an annualized turnover rate of 16 and a cost-to-equity ratio of 80%.
As part of the settlement, Gallo consented to the findings without admitting or denying them. The sanctions, detailed in a Letter of Acceptance, Waiver, and Consent (AWC), included a five-month suspension from associating with any FINRA member, effective January 6, 2025, through June 5, 2025.
Gallo’s professional background included employment with Spartan Capital Securities LLC, from July 2018 to July 2023, before joining Joseph Stone Capital L.L.C. in May 2023.
