Sebastian Wyczawski of Manorville New York a stockbroker formerly registered with Joseph Stone Capital LLC has been fined $5,000.00 and suspended for five months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by findings that Wyczawski made unsuitable recommendations to customers while he was associated with Joseph Stone Capital. Letter of Acceptance Waiver and Consent No. 2019063821602 (November 5, 2021).
According to the AWC, between June of 2016 and January of 2017, Wyczawski executed excessive and unsuitable trades in the account of a Joseph Stone customer. The AWC states that the customer was advised by Wyczawski to place twenty trades. The customer followed the stockbroker’s recommendations.
FINRA indicated that the customer’s account had $51,340.00 in average month-end equity, but Wyczawski made recommendations of trades that involved $528,759.00 in principal value. The customer’s account contained an annualized turnover rate of seventeen because of trades placed at Wyczawski’s direction. The customer had to pay $10,397.00 between margin interest, trading costs, and commissions. The account had a 34 percent cost-to-equity ratio, so the customer needed to generate 34 percent annual returns to avoid taking a loss.
The regulator also states that from September of 2016 to September of 2017, Wyczawski effected excessive trades in a second customer’s account, sometimes using margin. The customer was advised to make forty-five trades, and they went along with this. FINRA indicated that the customer’s average month-end equity was $14,831.00 when Wyczawski recommended trades containing a principal value of $300,524.00. The customer’s account contained a cost-to-equity ratio of 65 percent and an annualized turnover rate of seventeen.
FINRA determined that Wyczawski violated FINRA Rules 2010 and 2111 for making excessive and unsuitable trades in the customers’ accounts.
Wyczawski has been identified in two customer initiated investment related disputes containing accusations of his wrongdoing while employed by Milestone Financial Services Inc. and Joseph Stone Capital. FINRA Public Disclosure shows that a customer initiated investment related complaint regarding Wyczawski’s activities was resolved for $37,500.00 in damages based upon allegations of unauthorized trading of over-the-counter equities in the customer’s account when Wyczawski was registered with Milestone Financial Services.
On June 12, 2019, another customer initiated investment related FINRA securities arbitration claim involving Wyczawski’s conduct was settled for $17,500.00 in damages founded on accusations of unsuitable transactions and negligence relating to the customer’s account at Joseph Stone Capital. FINRA Arbitration No. 18-02049. The claim alleges breach of contract and breach of fiduciary duty pertaining to over-the-counter equities transactions. Wyczawski’s trading allegedly resulted in an overconcentration in risky investments. According to the claim, the customer was defrauded.
Wyczawski was employed by Joseph Stone Capital between July 6, 2015, and September 28, 2021. He has been associated with VSC Venture Securities since September 10, 2021.
