Michael Ciro Colletti, of Melville, New York, a stockbroker formerly registered with National Securities Corporation, was named in a Financial Industry Regulatory Authority (FINRA) Complaint containing allegations that he did not supervise the firm’s cold caller representatives, who utilized scripts for speaking with customers that contained inappropriate and possible investment misrepresentations. Department of Enforcement v. Michael Ciro Colletti, No. 2014042520501 (July 31, 2017).
According to the Complaint, from May of 2014 to October of 2014, cold callers went unsupervised in the branch office that Colletti managed, despite the firm’s policies requiring that their backgrounds and activities would be reviewed by Colletti. Apparently, these cold callers were not registered with the firm, but were nonetheless compensated by one of the firm’s registered representatives, AR, as well as Colletti.
Apparently, the firm’s policies were not abided by regarding hiring of the cold callers, wherein paperwork was not timely submitted by Colletti in reference to nine of the individuals working in the branch that Colletti was located in. The Complaint alleged that Colletti was not able to make sure that background checks were conducted as a result.
The Complaint further revealed that scripts were used by the cold callers to assist them probe prospective investors; yet the questions were not permitted to be asked based on the firm’s supervisory guidelines. The Complaint indicated that written supervisory procedures indicated that cold callers were disallowed from engaging in conversations with investors about services and products offered by the firm.
Apparently, The scripts reportedly referred to sending customers comparison sheets for investments as well as information concerning an investment bank’s initial public offering. Further, FINRA claimed that the cold caller scripts misrepresented the firm’s status by representing that the firm was formerly associated with Fidelity Investments. Moreover, the firm’s branch office apparently contained information about cold callers’ sales goals.
The Complaint stated that the cold callers were not permitted to engage in the activities of accumulating funds from investors of establishing investment accounts. FINRA alleged that Colletti’s supervisory failures in that regard amounted to violations of FINRA Rule 2010 and NASD Rule 3010.
On October 22, 2014, Colletti was fired form National Securities Corp based upon allegations that he did not inform the firm about an outside business activity that he engaged in. Colletti’s subsequent employer, Securities America, Inc., also terminated Colletti based on allegations of his non-disclosures at National Securities Corp. Since January 11, 2017, he has been registered with The Investment Center, Inc.
Mr. Colletti through his counsel “has responded to these allegations, and denied all charges,” and readers are reminded the the FINRA complaint contains only allegations, which ought not be construed as facts or proof of any wrongdoing or other form of misconduct.
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