David John Melilli of Moorestown New Jersey a stockbroker formerly registered with SagePoint Financial Inc. is the focus of a FINRA investigation on April 1, 2021 in which FINRA has determined that disciplinary action should be taken against Melilli for allegedly making excessive and unsuitable trades and for forging customer signatures. Case No. 20190636810 (Apr. 1, 2021).
According to the claim, FINRA Department of Enforcement may pursue disciplinary action against Melilli for possibly violating FINRA Rules 2010, 2360 and 2111 by making excessive and unsuitable trades in customer accounts. The regulator also noted that Melilli potentially violated FINRA Rules 2010, 2360, 3260, and National Association of Securities Dealers (NASD) Conduct Rule 2510(b) for effecting trades on a discretionary basis in customer accounts without getting pre-trade confirmation from customers.
The regulator also stated that Melilli possibly violated FINRA Rules 2010 by making an unauthorized trade in the account of a customer who was deceased at the time. Melilli faces potential disciplinary action for allegedly forging customer signatures in violation of FINRA Rules 2010 and 4511 and sending customers unauthorized communications relating to covered calls in violation of FINRA Rules 2010, 2220 and 2210. The regular additionally indicated that Melilli might have established accounts at outside investment firms without authorization in violation of FINRA Rules 2010 and 3210.
FINRA Public Disclosure shows that Melilli has been identified in three customer initiated investment related disputes concerning accusations of his harmful actions while employed by SagePoint Financial and Cambridge Investment Research. On February 19, 2020, a customer filed an investment related FINRA securities arbitration claim involving Melilli’s conduct where the customer sought $140,000.00 in damages based on allegations that their account was churned and that they had been defrauded while Melilli was associated with SagePoint Financial. FINRA Arbitration No. 20-00582. The claim alleges that Melilli breached a fiduciary duty to them and made unauthorized trades in their account.
Melilli is also referenced in a customer initiated investment related written complaint on September 4, 2020 in which the customer requested compensatory damages founded on accusations of unreasonable management fees and that the customer was not provided with important information regarding the risks of the stocks traded in their account during the period that Melilli was associated with Cambridge Investment Research.
On September 8, 2020, another customer filed an investment related complaint regarding Melilli’s conduct where the customer sought more than $5,000.00 in damages based upon allegations that Melilli effected unauthorized options trades in the customer’s account at SagePoint Financial.
Melilli’s registration with SagePoint Financial was terminated on August 21, 2019. He was registered with Cambridge Investment Research between September 16, 2019 and January 23, 2020 at which point he was discharged for allegedly making unauthorized trades.