Joseph Scott Audia of Hauppauge, New York, a stockbroker formerly registered with Joseph Stone Capital, has been fined $5,000.00 and suspended for two months from associating with any Financial Industry Regulatory Authority (FINRA) member in any principal capacity because he failed to supervise a stockbroker who engaged in unsuitable and excessive transactions. Letter of Acceptance, Waiver, and Consent No. 2019063821604 (December 20, 2021).
According to the AWC, from approximately December 2017 to May 2020, while he was associated with Joseph Stone Capital, Audia failed to reasonably supervise a registered representative who unsuitably and excessively traded in specific customer accounts. Part of Audia’s role as a supervisor at Joseph Stone was to review daily trade blotters and active account reports generated by the firm. These reports flagged accounts with high turnover rates and identified commission restrictions charged to customers. While Audia did review the reports, he failed to enforce commission restrictions and identify red flags that a representative was excessively trading customer accounts.
Specifically, in March 2018, Audi was provided with an account report that restricted a representative from charging markups or commissions on a particular customer’s account. At that time, the customer’s account had a cost-to-equity ratio of 78%. Further, the customer was charged a markup of 3.62% despite the restriction against markups found in the account report. As a result, Audia violated FINRA Rules 2010 and 3110.
Public Disclosure shows that Audia is referenced in three total customer initiated investment related disputes concerning Audia’s conduct while associated with securities broker dealers, including American Capital Partners LLC and Joseph Gunnar Co. On February 7, 2002, a customer filed an investment related complaint involving Audia’s conduct in which the customer requested $45,000.00 in damages based upon allegations that Audia failed to follow the customer’s investment instructions when Audia was associated with Joseph Gunnar Co.
On February 16, 2007, a different customer initiated investment related complaint involving Audia’s conduct was settled for $24,000.00 in damages based upon allegations that Audia engaged in unsuitable trading and churning, misused margin, made unauthorized transactions, and acted negligently with regard to the recommendation and sale of over-the-counter equities when Audia was associated with American Capital Partners LLC.
Audia is the subject of a customer complaint that was settled on June 11, 2010, for $5,000.00 in damages based upon allegations that Audia churned the customer’s account and made unsuitable and unauthorized transactions when Audia was associated with American Capital Partners LLC.
Audia has been associated with VCS Venture Securities since 2021. From 2013 to 2021, he was associated with Joseph Stone Capital. From 2007 to 2013, he was associated with First Midwest Securities.