Michael Salvatore Stanton, a former branch office manager and director of capital markets for Legend Securities, Inc., has been charged in a Complaint by Financial Industry Regulatory Authority (FINRA) Department of Enforcement containing allegations that Stanton failed to supervise a registered representative who defrauded a disabled, blind and elderly investor. Department of Enforcement v. Michael Stanton, No. 2015048048801.
According to the Complaint, between February of 2013 to December of 2015, Stanton and his firm did not pursue supervision systems and procedures which were adequately geared to prevent the excessive trading and churning in customer DC’s account by Hank Werner – a registered representative who Stanton supervised beginning in February of 2013. The written supervisory procedures in place, which the firm failed to abide by, called for Stanton’s review of Werner’s activities in the accounts of customers to make sure that transactions he effected were actually suitable for the customers.
Apparently, Stanton neither took into account customer DC’s need for income to cover health insurance and other costs; nor did he make sure that the transactions Warner effected in DC’s account were consistent with the objectives for investing which the customer communicated to Werner. According to the Complaint, by October 18, 2013, DC’s sustained losses totaling $30,622.26; however, Werner accumulated commissions totaling $54,762.60. FINRA alleged that Stanton’s supervisory mishaps were violative of FINRA Rule 2010, FINRA Rules 3110(a), 3110(b), and NASD Conduct Rules 3010(a) and 3010(b).
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that Stanton was named in a customer initiated investment related arbitration claim on March 6, 2017, in which the customer requested $214,000.00 in damages based upon allegations that the firm failed to adequately supervise Stanton’s activities, wherein Stanton effected unauthorized trades in the customer’s account and made unsuitable investment recommendations to the customer concerning stocks and a variable annuity.
Additionally, on January 16, 2006, a customer initiated investment related written complaint involving Stanton’s conduct was settled for $15,000.00 in damages based upon allegations of coercion and other sales practice violations pertaining to the customer’s margin call payment pertaining to over-the-counter equity investments.
Stanton’s registration with Legend Securities, Inc. was terminated on December 8, 2016. He became associated with Worden Capital Management LLC on December 14, 2016. Since January 21, 1986, Stanton has been associated with seventeen different broker dealers, fourteen of which have been expelled by securities regulators for violation of federal securities laws or are otherwise defunct. #cockroach
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