Michael Joseph Dugan (also known as Michael Joe Dugan), of New York, New York, a stockbroker registered with Spartan Capital Securities LLC, has been suspended for seven months from associating with any Financial Industry Regulatory Authority (FINRA) member in all capacities by FINRA because Dugan engaged in excessive trading in the accounts of two customers. Letter of Acceptance, Waiver, and Consent No. 2018056490327 (April 1, 2025).
According to the AWC, this regulatory action stems from a FINRA cycle examination of Spartan Capital Securities LLC. FINRA found that between May 2017 and April 2022, Dugan exercised control over the accounts of two customers who relied on his recommendations and constantly followed his advice. The trading activity in both accounts resulted in high turnover rates and cost-to-equity ratios, which exceeded thresholds that typically indicate excessive trading.
In one case, Dugan recommended 171 transactions between May 2017 and November 2021 for a 60-year-old customer with a moderate risk tolerance. The account experienced an annualized turnover rate of 16 and a cost-to-equity ratio of 66 percent. This trading generated $118,905 in commissions and led to $63,111 in realized losses.
In another instance, Dugan recommended 95 transactions between July 2020 and April 2022 for a 65-year-old consultant with an aggressive growth/income objective. This account had an annualized turnover rate of 38 and a cost-to-equity ratio of 63 percent, producing $24,312 in commissions and $153,661 in realized losses.
FINRA determined that Dugan’s trading was excessive, unsuitable, and not in the best interest of either customer, violating Regulation BI’s Care Obligation (Exchange Act Rule 15l-1(a)(1)), as well as FINRA Rules 2010 and 2111.
FINRA Public Disclosure also shows that on May 25, 2013, a customer filed an investment related complaint involving Dugan’s conduct in which the customer requested $93,930.89 in damages based upon allegations that Dugan engaged in discretionary trading in stocks without prior written authorization when Dugan was associated with Seaboard Securities Inc. This complaint was closed without further action taken by the customer.
On September 30, 2007, a different customer initiated investment related FINRA securities arbitration claim involving Dugan’s conduct was settled for $60,000.00 in damages based upon allegations that Dugan made misrepresentations of material fact, engaged in unauthorized trading, violated FINRA rules, churned accounts, engaged in excessive trading, overconcentrated accounts, failed to diversify investments, and engaged in improper margin use when Dugan was associated with CAC Capital and Clark Dodge Company. NASD-DR 07 2079.
Dugan has been associated with Alexander Capital, L.P. in Staten Island, New York since October 11, 2024. He was associated with Craft Capital Management LLC in Red Bank, New Jersey from April 17, 2023 to April 16, 2024, and Spartan Capital Securities LLC in New York, New York from March 6, 2017 to May 1, 2023.
