scales of justice

John Anthony Orlando of Fort Lauderdale, Florida, a stockbroker formerly registered with Westpark Capital Inc., has been charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement with making unsuitable recommendations, falsifying information on Westpark Capital’s books and records relating to his solicitation of trades, and falsifying statements to the securities broker dealer regarding his communications with a customer. Department of Enforcement v. John A. Orlando, Disciplinary Proceeding No. 2019063633301 (March 31, 2022).

According to the Complaint, between September of 2016 and July of 2019, Orlando made excessive trades and churned the account of Customer A. The regulator alleges that Orlando had the customer buy a large amount of IPO shares and secondary offerings through Westpark. Orlando recommended for the customer to sell their positions shortly after purchasing them, resulting in losses. In some cases, Orlando recommended that the customer buy and sell the same security on the same day. Through this strategy, Orlando would determine which of the offerings the customer should invest in and sell and when the customer should make those transactions.

FINRA states that Orlando recommended that the customer take part in at least 100 offerings between September of 2016 and July of 2019. This resulted in more than 1,000 trades. At least $600,000.00 in commissions had been generated by Orlando and Westpark from the customer on the transactions. Another $700,000.00 went towards costs to underwriters in the offerings. This resulted in the customer sustaining $1,245,000.00 in realized and unrealized losses.

The customer’s account at Westpark had an annualized cost-to-equity ratio of 74 percent and an annualized turnover rate of 9.65. FINRA Department of Enforcement alleges that Orlando violated Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5, and FINRA Rules 2010, 2020, and 2111.

The regulator also contends that Orlando made unsuitable recommendations, as he did not grasp the performance, benefits, and risks of the securities he advised customers to buy and sell. The stockbroker purportedly failed to have an adequate basis for believing that his recommendations were suitable for any investor whatsoever. According to the Complaint, Orlando did not understand the costs and fees relating to his recommendations; he did not know how the customer’s profitability would be affected. The regulator alleges that Orlando also failed to undertake due diligence on the issuers of the securities and failed to understand the profitability of warrants issued by companies with little-to-no income or revenue. Orlando allegedly violated FINRA Rules 2010 and 2111 for unsuitable recommendations.

According to the Complaint, Orlando also mismarked 87 transactions as unsolicited when he solicited them, violating FINRA Rules 2010 and 4511. Orlando also purportedly lied to Westpark about his communications with Customer A in that he claimed that he did not text the customer. The regulator claims that he exchanged 225 texts with the customer between August of 2016 and December of 2018. Orlando allegedly violated FINRA Rule 2010 for this reason.

FINRA Public Disclosure shows that Orlando has been identified in six customer initiated investment related disputes containing allegations of his conduct while registered with securities broker dealers, including Westpark Capital, Newport Coast Securities, and SA Stone Wealth Management. On October 18, 2021, a customer filed an investment related FINRA securities arbitration claim concerning Orlando’s conduct in which the customer sought $1,200,000.00 in damages supported by accusations of unauthorized trading, breach of contract, unsuitable trading, and fraud during the time that Orlando was registered with Westpark Capital and Newport Coast Securities. FINRA Arbitration No. 21-02353 (October 18, 2021).

Orlando is referenced in another customer initiated investment related FINRA securities arbitration claim which was settled for $30,000.00 in damages based upon allegations of negligence and breach of fiduciary duty relating to the customer’s investment in Horizon Fund through Orlando between August of 2016 and March of 2017. FINRA Arbitration No. 20-02201 (November 24, 2021).

On March 15, 2022, a different customer initiated investment related FINRA securities arbitration claim involving Orlando’s activities was resolved for $1,050,000.00 in damages founded on accusations of overconcentration, unsuitable margin use, and excessive trading as it pertained to private placement and stock transactions when Orlando was employed by Westpark Capital and Newport Coast Securities. FINRA Arbitration No. 20-01721.

Orlando was associated with Westpark Capital between August 4, 2016, and September 24, 2019. Since November 5, 2019, he has been registered with SW Financial.