David Gene Menashe of Mineola, New York, a stockbroker formerly registered with Joseph Stone Capital, L.L.C., is the subject of an Order issued by the State of Montana Commissioner of Securities & Insurance obligating $15,000.00 in restitution to a customer based on allegations that Menashe effected unauthorized trades in the customer’s account, and effected trades on an excessive basis. In the Matter of Joseph Stone Capital, et al., Case No. SEC-2016-124.

According to the Notice of Proposed Agency Action and Opportunity for Hearing, Menashe was associated with Joseph Stone as their sales representative during the period in which customer RS effected $86,684.56. Particularly, Menashe effected fifty-two transactions in twenty different securities in the investment accounts over a thirty-month period, leading the customer’s investments to underperform while placing the customer on the hook for paying large commissions.

Particularly, the Notice stated that the customer’s purchases totaled $2,650,549.00, where the account contained a 11.48 Looper turnover rate in that regard; the customer’s sales totaled $2,646,295.46, where RS’s account contained a Looper turnover rate of 11.46. Critically, the Notice revealed that Looper turnover rates of six and higher refer to trading that is excessive. The firm and Menashe reportedly accumulated a ninety-four percent profit on the funds that the customer invested. The Notice claimed that the firm and Menashe violated Admin R. Mont. 6.10.401(1)(k) by causing the customer to pay excessive commissions.

Menashe was terminated from Joseph Stone Capital L.L.C. on January 25, 2017. On January 19, 2017, Menashe became associated with Newbridge Securities Corporation in New York, New York. Since December 2, 2009, he has been associated with six different broker dealers, three of which have been expelled by securities regulators for violation of federal securities laws or are otherwise defunct.

Guiliano Law Group

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