John Sebastion Cangialosi Jr., of New York, NY, a stockbroker registered with SW Financial, has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Cangialosi failed to cooperate with an investigation into his potential outside business activities. Letter of Acceptance, Waiver, and Consent No. 2022075928701 (March 6, 2024).
In this case, Cangialosi was requested by FINRA to provide testimony on January 3, 2024, and January 25, 2024, as part of an examination of his outside business activities. Despite acknowledging the receipt of these requests, Cangialosi, through his lawyer, informed FINRA that he would not appear for the testimony. By refusing to testify, Cangialosi violated FINRA Rules 2010 and 8210.
This is not the first time that Cangialosi has been the subject of a regulatory action concerning his conduct in the securities industry. FINRA Public Disclosure shows that Cangialosi was suspended for nine months and fined $7,500.00 by FINRA because Cangialosi engaged in excessive trading in customer accounts. Letter of Acceptance, Waiver, and Consent No. 2017056432605 (August 12, 2021).
While associated with Salomon Whitney LLC, from October 2014 through December 2018, Cangialosi engaged in quantitatively unsuitable trading in three customer accounts. He recommended and executed high-frequency trades, resulting in the customers often holding concentrated positions in one or two securities for short periods.
The AWC stated that Cangialosi’s trading strategy led to high turnover rates and cost-to-equity ratios, causing losses to these customers. The three accounts incurred collective realized losses of $405,255.00, while the total trading costs amounted to $311,229.00, including $292,657.00 in commissions. This excessive and unsuitable trading strategy was in violation of FINRA Rules 2111 and 2010.
FINRA Public Disclosure shows that Cangialosi is referenced in ten customer initiated investment related disputes concerning Cangialosi’s conduct while associated with securities broker dealers. On November 20, 2015, a customer initiated investment related FINRA securities arbitration claim involving Cangialosi’s conduct was settled for $9,999.00 in damages based upon alleged negligence, fraud, breach of contract, churning, unsuitable recommendations, and misrepresentations of material fact in connection with the sale of over-the-counter equities and stocks when Cangialosi was associated with Brookstone Securities Inc. FINRA Arbitration No. 15-03051.
On January 8, 2018, a customer initiated investment related FINRA securities arbitration claim involving Cangialosi’s conduct was settled for $30,000.00 in damages based upon allegations that Cangialosi engaged in churning of the customer’s account, engaged in unsuitable and unauthorized trading, was negligent, breached his fiduciary duties, and breached a contract in connection with the sale of stocks during the time that Cangialosi was associated with Legend Securities Inc. FINRA Arbitration No. 17-03396.
Cangialosi is also referenced in a customer initiated investment related FINRA securities arbitration claim in which the customer requested $1,281,156.00 in damages based upon alleged excessive commissions, churning, unauthorized trading, breach of contract, negligence, and fraud in connection with the sale of stocks and over-the-counter equities when Cangialosi was associated with Worden Capital management LLC. FINRA Arbitration No. 22-00347 (March 21, 2022).
On December 5, 2022, a customer filed an investment related FINRA securities arbitration claim involving Cangialosi’s conduct in which the customer requested $510,152.82 in damages based upon allegations that Cangialosi made unsuitable recommendations, churned the customer’s account, and was negligent in connection with the sale of over-the-counter equities and stocks during the time that Cangialosi was associated with SW Financial and Worden Capital. FINRA Arbitration No. 22-02457. The claim also alleged that the securities broker dealers failed to supervise Cangialosi.
Cangialosi is also referenced in a customer initiated investment related FINRA securities arbitration claim in which the customer requested $1,012,717.00 in damages based upon allegations that Cangialosi engaged in unsuitable, unauthorized, and excessive trading, and was negligent in connection with the sale of stocks and over-the-counter equities when Cangialosi was associated with SW Financial. FINRA Arbitration No. 22-02586 (March 3, 2023).
Cangialosi was associated with SW Financial in New York, New York from December 10, 2019, to August 16, 2022. FINRA expelled the firm on May 12, 2023. Cangialosi was also associated with Worden Capital Management LLC in New York, New York from November 4, 2016, to December 10, 2019. FINRA expelled the firm on July 25, 2022.
