Frank John Capuano of Holyoake Massachusetts a stockbroker formerly registered with Royal Alliance Associates Inc. is the subject of a customer initiated investment related arbitration claim which was settled for $100,000.00 in damages supported by accusations that the customer had been placed into unauthorized investments which were part of a Ponzi Scheme. Financial Industry Regulatory Authority (FINRA) Arbitration No. 18-00900 (Jan. 23, 2019).
This is the first dispute which Capuano has been referenced in since being sanctioned by FINRA. In particular, Capuano has been fined $10,000.00 and suspended for twelve months from associating with any FINRA member supported by findings that he sold away from the firm, soliciting and selling Woodbridge notes to firm customers without ever procuring permission from Royal Alliance Associates. Letter of Acceptance Waiver and Consent No. 2015046273001 (Apr. 21, 2016).
According to the AWC, Capuano discovered in 2014 that securities were being offered by Woodbridge Mortgage Investment Funds. Thereafter, he offered the notes to customers of the firm and even made investments in the notes himself. Evidently, nine customers of Royal Alliance Associates bought $1,100,000.00 worth of the Woodbridge promissory notes.
During this time; however, Capuano was obligated to seek approval from the firm for any transactions the stockbroker planned to execute away from the firm. Evidently, no approval from Royal Alliance Associates had been sought by Capuano before he facilitated the transactions. Evidently, Capuano earned $34,000.00 in commission on the Woodbridge notes. FINRA found Capuano’s conduct violative of FINRA Rule 2010 and NASD Rule 3040.
Woodbridge later filed for bankruptcy, and its owner was ordered by a Florida court on January 28, 2019 to pay fines and penalties totaling $1,000,000,000.00 for executing a Ponzi Scheme.
