Vincent Sciabica of Albany New York is a stockbroker formerly registered with Morgan Stanley who has been fined five thousand dollars and suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he effected unit investment trust transactions in customer accounts in a manner which was not suitable for customers. Letter of Acceptance Waiver and Consent No. 2014042724101 (Nov. 26 2018).
According to the AWC, from January of 2013 to August of 2014, Sciabica placed unsuitable trades of unit investment trusts on a short-term basis in three-hundred fifty nine accounts owned by customers of the firm. The AWC stated that unit investment trusts are not meant to be traded since they offer a fixed securities portfolio that terminates at the maturity date. FINRA additionally noted that unit investment trusts products often contain substantial charges on the front end just like class a mutual fund shares, so any trading on a short term basis is typically inappropriate.
The AWC stated that customers had been advised by Sciabica to buy unit investment trusts and then sell them well before the investments had maturated. Evidently, most of Sciabica’s unit investment trust recommendations pertained to products in which investors would have to wait two years for the products to mature. The unit investment trusts that Sciabica positioned contained expenses ranging from 1.95% to 3.95%.
Sciabica apparently thought it was a good idea for investors to sell their unit investment trust positions after only holding them for less than twelve months. The AWC stated that the unit investment trusts were only held for about two-hundred eighteen days. Moreover, FINRA determined that in at least one thousand occasions, customers were instructed to sell their unit investment trust positions early and buy other unit investment trusts containing objectives for investing that were similar to the previous unit investment trusts that customers invested in. FINRA viewed Sciabica’s investment recommendations as failing to be suitable based upon the cost of the transactions and frequency that those transactions were executed. Sciabica’s conduct was found by FINRA to be violative of FINRA Rules 2010 and 2111.
FINRA Public Disclosure confirms that on November 13, 2014, a customer initiated investment related written complaint pertaining to Sciabica’s conduct was settled to resolve allegations that Sciabica made misrepresentations to the customer concerning the commissions that were to be assessed on exchange traded funds transactions.
Sciabica was fired by Morgan Stanley on August 21, 2014, based upon the firm’s concerns that Sciabica effected unauthorized unit investment trust transactions in customers’ accounts. Since September 26, 2014, Sciabica has been registered with Merrill Lynch, Pierce, Fenner & Smith Inc.
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