Michael Salvatore Stanton of New York New York a former Director of Capital Markets for Legend Securities Inc. is referenced in a customer initiated investment related arbitration claim in which the customer sought $15,000,000.00 in damages founded on allegations that (1) contractual obligations to the customer had been breached (2) the customer’s account was administered negligently (3) fiduciary duties were breached (4) Stanton and Legend Securities Corp. failed to supervise stock and over-the-counter equities trades placed in the customer’s account and (5) the customer had been defrauded. Financial Industry Regulatory Authority (FINRA) Arbitration No. 18-04040 (Jan. 11, 2019).
FINRA Public Disclosure confirms that Stanton has been identified in three additional customer initiated investment related disputes pertaining to accusations of his misconduct during the period in which he was employed by Legend Securities Inc. and Summit Brokerage Services Inc. Specifically, a customer initiated investment related complaint concerning Stanton’s activities was resolved for $15,000.00 in damages supported by allegations that during the time that Stanton was associated with Summit Brokerage Services Inc., the customer was induced into making margin call payments relating to volatile over-the-counter equities holdings.
Then, a customer initiated investment related arbitration claim regarding Stanton’s conduct was settled for $20,000.00 in damages based upon accusations that Stanton failed to supervise a stockbroker’s activities in the customer’s account; trades were executed in excessive amounts; and recommendations made to the customer concerning stocks and variable annuity products were not suitable. FINRA Arbitration No. 16-03695 (July 9, 2018). Additionally, a customer initiated investment related arbitration claim involving Stanton’s activities was settled to resolve allegations that during the period in which Stanton was employed by Legend Securities, he violated New York Stock Exchange (NYSE) and National Association of Securities Dealers (NASD) rules; contractual obligations to the customer had been violated; and the customer’s account was inadequately supervised. FINRA Arbitration No. 17-00910 (Aug. 28, 2018).
FINRA Public Disclosure additionally reveals that Stanton has been fined $5,000.00 and suspended from associating with any FINRA member in any capacity according to a FINRA Office of Hearing Officers Order Accepting Offer of Settlement containing findings that Stanton failed to supervise a stockbroker, Hank M. Werner, who engaged in a fraudulent scheme which included churning the accounts of an elderly and blind customer which produced $174,000.00 in losses and caused the customer to pay at least $232,000.00 in fees and commissions. Department of Enforcement v. Michael Stanton Disciplinary Proceeding No. 2015048048801 (May 25, 2017).
Evidently, the customer’s accounts exposed to Werner’s churning had annual cost-to-equity ratios ranging between seventy-nine percent and one hundred forty-one percent. Apparently, Stanton neglected to create and implement an adequate supervision system along with written supervisory procedures aimed at identifying and preventing the excessive trading and churning from stockbrokers including Werner. FINRA found Stanton’s conduct to be violative of FINRA Rules 2010 and 3110 as well as NASD Conduct Rule 3010.
Legend Securities was expelled by FINRA in April 2017. Since December 14, 2016, Stanton has been registered with Worden Capital Management LLC. Stanton has been associated with eighteen securities broker dealers thirteen of which are defunct or have been expelled by securities regulators for violation of federal securities laws.
