Michael John Giovannelli of Garden City New York a stockbroker formerly registered with Spartan Capital Securities LLC has been charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement with effecting an unauthorized trade in a customer’s account when Giovannelli was associated with Spartan Capital Securities. Department of Enforcement v. Michael J. Giovannelli Disciplinary Proceeding No. 2019061941101 (June 17, 2021).
According to the Complaint, between February of 2020 and April of 2020, unauthorized transactions were made by Giovannelli on 12 occasions in the account of an elderly Spartan Capital customer. The stockbroker allegedly violated FINRA Rule 2010.
The regulator contends that attempts were made by Giovannelli to hide his unauthorized trading. When he was investigated by FINRA, he was told to provide his phone records for February 2020 through April of 2020. Altered documents were purportedly provided by Giovannelli in return. There were five calls that had allegedly been doctored by Giovannelli so that it would look as though he had called and spoke with a customer concerning his trading and got authorization. FINRA alleged that Giovannelli violated Rules 2010 and 8210 for providing false documents while under investigation.
Giovannelli was also asked by FINRA to testify about his phone records. Giovannelli supposedly did not admit to having altered documents. The Complaint alleges that he falsely testified as to getting the elderly customer’s approval prior to making trades in their account. FINRA Department of Enforcement alleges that Giovannelli lied in violation of Rules 2010 and 8210.
The regulator also contends that from September of 2018 to March of 2019, at least 100 transactions were executed in the accounts of Richard James Associates customers by Giovannelli. There was no written permission that Giovannelli obtained from Richard James Associates or those customers to warrant trades he made on a discretionary basis. Department of Enforcement contends that Giovannelli violated FINRA Rule 2010 and National Association of Securities Dealers (NASD) Rule 2510(b).
FINRA Public Disclosure shows that Giovannelli has been identified in three customer initiated investment related disputes containing allegations of his misconduct while associated with Woodstock Financial Group and SW Financial. Giovannelli is the subject of a customer initiated investment related written complaint in which the customer sought $55,000.00 in damages based upon accusations of misrepresentation relating to an investment purchase.
On November 2, 2017, a customer initiated investment related complaint involving Giovannelli’s conduct was resolved for $5,000.00 in damages founded on allegations that the customer’s account was churned by the stockbroker. The claim alleges that the customer sustained damages because of Giovannelli’s unauthorized trading at SW Financial.
On August 27, 2020, a customer who brought an investment related FINRA securities arbitration claim against Giovannelli was awarded $97,292.27 in compensatory damages and $12,500.00 in punitive damages based on Giovannelli being found liable on the customer’s claims including negligence and fraud. FINRA Arbitration No. 20-00470. According to the claim, Giovannelli’s unsuitable trading and excessive commissions caused damages to the customer as it pertained to Barclays iPath SP500 VIX Short Term ETN and Square Inc. The customer also alleges churning.
Giovannelli was discharged by Spartan Capital Securities on July 31, 2020 for allegedly making unauthorized trades in customer accounts.
