Salvatore Gambino, of Melville, New York, a stockbroker registered with Aegis Capital Corp., has been fined $5,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Gambino made unsuitable investment recommendations during the time that he was registered with Aegis Capital Corp. Letter of Acceptance, Waiver, and Consent, No. 2018060896801 (October 27, 2023).
According to the AWC, from October of 2015 to April of 2018, Gambino recommended and sold limited partnership interests in GPB Automotive Portfolio LP, an offering by GPB Capital, to three of his customers. The regulator stated that his recommendations were unsuitable considering the customers’ investment profiles.
One key issue was that none of these customers qualified as accredited investors, a requirement for investing in GPB Automotive Portfolio. Additionally, the investments were unsuitable in terms of the customers’ net worth, age, objectives, and income.
For instance, Customer A invested $50,000.00 in March of 2016 but did not meet the accredited investor criteria and aimed to preserve capital. Customer B, who was in his late sixties, invested a total of $100,000.00 between April of 2016 and April of 2018, which led to over 30 percent of his liquid net worth being tied up in illiquid investments, exceeding his non-accredited investor status. Customer C, who was in his early sixties, also invested $100,000.00 between October of 2015 and May of 2017, with a balanced growth objective and moderate risk tolerance, and with no previous experience in alternative investments.
By advising investments in the GPB Automotive Portfolio to customers who were not accredited investors and whose profiles did not align with the risks and illiquidity of such investments, Gambino violated FINRA Rules 2010 and 2111.
On July 13, 2021, a different customer initiated an investment related FINRA securities arbitration claim involving Gambino’s conduct. This claim was settled for $40,000.00 in damages based upon allegations that Gambino made unsuitable recommendations of structured products while he was associated with Aegis Capital Corp. FINRA Arbitration No. 21-01148.
Gambino is also referenced in another customer initiated complaint that was settled on August 26, 2021, for $20,000.00 in damages. The allegations in this complaint centered around Gambino’s unsuitable recommendations of alternative investments, which poorly performed.
Further, on December 23, 2021, a customer initiated investment related FINRA securities arbitration claim concerning Gambino was resolved. This dispute, settled for $23,000.00 in damages, was based on allegations that Gambino recommended unsuitable alternative investments. FINRA Arbitration No. 21-02516.
A different customer filed a dispute dated September 16, 2021, in which the customer requested $50,000.00 in damages based upon allegations of breach of contract, negligence, and breach of fiduciary duty by Gambino in connection with the sale of alternative investments. FINRA Arbitration No. 21-02349.
Gambino was associated with Aegis Capital Corp. in Melville, New York from February 19, 2010, to November 30, 2020.