Frank Venturelli (also known as Frank Vaughn) of Bay Ridge New York a stockbroker formerly associated with First Standard Financial Company has been suspended for 11 months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by consenting to findings that he facilitated excessive transactions in customer accounts during the period that he was employed by First Standard Financial Company. Letter of Acceptance Waiver and Consent No. 2017052466303 (June 19, 2020).
According to the AWC, between July of 2016 and November of 2018, Venturelli effected quantitatively unsuitable trades in the accounts of three customers – RK, LK and AR. The AWC stated that trades in these customers’ accounts been directed by Venturelli as the customers followed Venturelli’s recommendations and enabled Venturelli to have control over their accounts.
FINRA stated that cost-equity-ratios and turnover rates resulted from Venturelli’s trading. RK’s account contained an annual cost-to-equity ratio of 105.89 percent and an annual turnover rate of 40.06. This generated $62,807.00 in fees and commissions for Venturelli. RK sustained $142,493.00 in losses. LK’s account contained an annual cost-to-equity ratio of 88.18 percent and a turnover rate of 30.29. Venturelli accumulated $49,641.00 in fees and commissions from LK while causing LK to sustain $133,748.00 in losses. AR’s account was exposed to an annual cost-to-equity ratio of 146.53 percent and an annual turnover rate of 60.57. The AWC stated that Venturelli took in $57,355.00 in fees and commissions but the customer sustained $96,985.00 in losses.
Venturelli’s trading was unsuitable and excessive because of customers’ investment profiles. He made it all but certain that customers would not earn a profit – and customers indeed sustained $373,226.00 in undue losses because of Venturelli. FINRA determined that he violated FINRA Rules 2010 and 2111 in this respect.
FINRA Public Disclosure indicates that a customer filed an investment related arbitration claim pertaining to Venturelli’s conduct in which the customer requested $50,000.00 in damages supported by allegations that transactions failed to be suitable and had been facilitated in the customer’s account in an excessive manner by Venturelli during the period in which he was employed by First Standard Financial. FINRA Arbitration No. 19-00082 (Mar. 1, 2019).
Venturelli’s employment with First Standard Financial Company was terminated on September 25, 2019. He was registered with Arive Capital Markets between September 23, 2019 and December 17, 2019.