Roy Joseph Failla of Red Bank New Jersey a stockbroker formerly registered with First Standard Financial Company LLC has been fined $15,000.00 and suspended for 45 days from being a stockbroker in New Jersey according to a Consent Order containing findings that Failla executed unsuitable and excessive trades in customer accounts while Failla was associated with First Standard Financial Company. In the Matter of Roy Joseph Failla (Jan. 4, 2021).
According to the Order, between October 27, 2014 and September 25, 2019, excessive and unsuitable trades had been made by Failla in the accounts belonging to two First Standard Financial Company customers. The investment strategy that Failla effected resulted in a high rate of short-term trades in customers’ commission-based accounts. Each time Failla executed a purchase or a sale, a commission was charged. This type of trading diminished investors’ chances at generating a profit and made losses carry greater significance.
New Jersey Bureau of Securities found there to be no benefit to customers that came from Failla’s trading strategy. The regulator noted that Failla was required under both FINRA rules and the state’s securities laws to have a reasonable basis to recommend an investment strategy. But risky investments were traded by Failla without the stockbroker having an adequate basis to believe that the strategy was appropriate.
FINRA noted that Failla harmed a 72-year-old customer, JB, by placing 40 percent of her investment portfolio in risky bonds. Those securities were bought and sold by Failla on an active basis creating losses for the customer and commissions for the stockbroker. The regulator also noted that customer BE was harmed by Failla’s aggressive trading strategy which resulted in $178,866.00 in net losses to the customer even though the transactions generated fees and commissions of $62,709 between April of 2016 and June of 2019.
The Bureau also found that Failla’s trading was unsuitable given the one customer’s risk tolerance, liquidity needs, investment experience, investment objectives, financial needs, and age.
The regulator determined that Failla violated New Jersey securities laws through making unsuitable recommendations.
Failla has been identified in five customer initiated investment related disputes regarding accusations of his misconduct when employed by JP Turner Company LLC, Alexander Capital LP, and First Standard Financial Company. FINRA Public Disclosure reveals that Failla is the subject of a customer initiated investment related written complaint which was settled for $75,000.00 in damages supported by allegations that the stockbroker effected unauthorized, unsuitable and excessive trades. Failla allegedly made misrepresentations to the customer and defrauded them regarding over-the-counter equities. The claim also alleges that Failla breached his fiduciary duty.
Another customer initiated investment related FINRA securities arbitration claim concerning Failla’s conduct was settled for $40,000.00 in damages based upon allegations that unsuitable trades were executed by Failla when he was associated with JP Turner Company. The claim also alleges that the customer’s account was churned and that transactions were misrepresented by the stockbroker.
Failla is also referenced in a customer initiated investment related FINRA securities arbitration claim which was resolved for $200,000.00 in damages founded on accusations of unsuitable and unauthorized stock trades by Failla while he was associated with First Standard Financial Company and Alexander Capital. FINRA Arbitration No. 18-01980 (Oct. 7, 2019). Another customer filed an investment related FINRA securities arbitration claim involving Failla’s activities in which the customer requested $147,000.00 in damages based on allegations of Failla’s unsuitable trading of common and preferred stock while registered at First Standard Financial Company. FINRA Arbitration No. 21-01157 (May 11, 2021).
Failla’s registration with First Standard Financial Company has been terminated as of September 25, 2019. He has been registered with Arive Capital Markets since September 21, 2019. Eight of the last nine firms Failla has been associated have been expelled by regulators or are otherwise defunct.