Joseph Brian LaScala Jr. (also known as Joe LaScala Jr.), of Melville, New York, a stockbroker currently registered with Aegis Capital Corp, has been fined $7,500.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings of LaScala’s unsuitable and unauthorized trading in Aegis Capital Corp customer accounts. Letter of Acceptance, Waiver, and Consent No. 2021070337201 (January 24, 2022).
According to the AWC, from July of 2014 to April of 2016, short-term trades in a customer’s account were made by LaScala. The customer’s 401(k) contained 235 trades during this period, which resulted in an annualized turnover rate of 5.8 and an annualized cost-to-equity ratio of 29.16 percent. The customer sustained $116,194.00 in losses and $90,720.00 in trading costs because of LaScala’s short-term trading.
The AWC states that LaScala decided the stocks to be traded and the timing of trades. The regulator noted that 139 of the trades were made by LaScala on a discretionary basis. FINRA also states that the frequency and volume of LaScala’s trading showed that he controlled the customer’s account.
FINRA states that LaScala violated FINRA Rules 2010 and 2111 by effecting unsuitable and excessive trades.
LaScala also lacked authorization for discretionary trading. He did not have any written authorization from an Aegis Capital Corp customer to effect trades in their retirement account. He also did not have Aegis Capital Corp’s permission for discretionary trading. LaScala still effected trades with a principal value of $2,000,000.00 in 16 months. LaScala violated FINRA Rule 2010 and NASD Rule 2510(b) for this reason.
LaScala has been identified in five customer initiated investment related disputes regarding accusations of his wrongdoing during the time that he was employed by securities broker dealers, including GunnAllen Financial, Paulson Investment Company, and Investec Ernst Company. FINRA Public Disclosure shows that a customer filed an investment related complaint concerning LaScala’s conduct where the customer requested $50,000.00 in damages supported by allegations of their account being mishandled and overconcentrated in over-the-counter equities when LaScala was registered with Investec Ernest Company.
Another customer initiated investment related arbitration claim regarding LaScala’s activities was resolved for $275,000.00 in damages founded on accusations of the failure to supervise over-the-counter equities trades and common and preferred stock trades in the customer’s account while LaScala was associated with GunnAllen Financial.
LaScala is referenced in a different customer initiated investment related arbitration claim which was settled for $7,500.00 in damages based upon allegations of LaScala failing to supervise at GunnAllen Financial as it pertained to over-the-counter equities transactions. According to the complaint, the customer’s account was also mishandled.
An additional customer initiated investment related arbitration claim involving LaScala’s activities was resolved based on accusations including excessive concentration, churning, and unsuitable recommendations concerning mutual funds, stocks, and over-the-counter equities transactions while LaScala was employed by GunnAllen Financial.
LaScala is identified in a customer initiated investment related arbitration claim which was settled for $30,000.00 in damages supported by allegations of LaScala’s failure to supervise, resulting in excessive and unsuitable trading at GunnAllen Financial and Paulson Investment Company.
LaScala has been registered with Aegis Capital Corp as a stockbroker since February 29, 2012, and as an investment adviser representative since January 14, 2014.