Damian Maggio, of Garden City, New York, a stockbroker and the Chief Executive Officer of Joseph Stone Capital L.L.C., was the subject of a customer initiated investment related Financial Industry Regulatory Authority (FINRA) securities arbitration claim in which the customer requested $354,994.55 in damages based upon allegations that Maggio failed to supervise certain representatives in connection with the recommendation and sale of over-the-counter equities when Maggio was associated with Joseph Stone Capital L.L.C. FINRA Arbitration No. 2202494 (August 3, 2023).
Maggio was also referenced in a customer initiated investment related FINRA securities arbitration claim in which the customer requested $2,807,663.24 in damages based upon allegations that Maggio failed to supervise certain representatives in connection with the sale of over-the-counter equities during the time that Maggio was associated with Joseph Stone Capital L.L.C. FINRA Arbitration No. 21-03107 (January 12, 2022).
According to Public Disclosure the “Representative was named in a multi-claimant group arbitration solicited by a non-attorney, third-party arbitration cold calling solicitation company, solely on the basis that his name appears on the publicly available Schedule A of Form BD. Representative had no supervisory oversight of the registered representatives (also named in the action) nor the clients’ accounts at any time during the duration of the account.”
In fact, Maggio is the Chief Executive Officer of Joseph Stone Capital L.L.C.
However, whether or not Maggio was the direct supervisor of the offending broker is irrelevant. Maybe the “non-lawyers” suing Maggio know this. Maggio is a “control person” with the power and ability to control the offending broker and his broker-dealer, in whichm through DPMM Holdings, he owns more than 75% of capital stock. Hollinger v. Titan Capital Corp., 914 F.2d 1564, 1573 (9th Cir. 1990)(“Congress adopted Section 20(a) in an attempt to protect the investing public from representatives who were improperly supervised or controlled”). In order to establish liability under Section 20(a), a plaintiff need only allege that the controlling person had knowledge, or at least a duty to know, of the alleged wrongful activity, and the power or ability to control or influence the affairs of the controlled persons. Arthur Children’s Trust v. Keim, 994 F.2d 1390, 1398 (9th Cir. 1993); Powers v. Eichen, 977 F. Supp. 1031, 1044-45 (N.D. Cal. 1997) (“plaintiff need not show day-to-day control of affairs, only that defendants had possession of the power to influence in order to state a claim under Section 20(a)”); Safeway Portland Employees’ Fed. Credit Union v. C.H. Wagner & Co., 501 F.2d 1120 (9th Cir. 1974) (same); See also., Platsis v. E.F. Hutton & Co., Inc., 642 F. Supp. 1277 (W.D. Mich. 1986) (liability will attach under Section 20(a) where control person exercises control in the activities or operations of the control person).
This is not the first time that Maggio has been referenced in a customer initiated investment related dispute concerning his conduct in the securities industry. FINRA Public Disclosure shows that Maggio was also referenced in a customer initiated investment related civil action that was settled to resolve allegations that Maggio violated the Securities Act of 1933 in connection with the sale of Reg-D products when Maggio was associated with LH Ross. Civil Action No. CV-04-135-M-DWM (August 18, 2004).
Maggio has been associated with Joseph Stone Capital L.L.C. in Garden City, New York since February 26, 2013.
