Alphonse Stazzone (Alphonse Joseph Stazzone CRD:#4908107) is a previously registered broker and whose last known employer was Monmouth Capital Management LLC (CRD#:290248) of Holmdel, New Jersey. His previous employers include Garden State Securities, Inc. (CRD#:10083) of Red Bank, NJ and Woodstock Financial Group, Inc. (CRD#:38095) of Staten Island, NY. He has been in the industry since 2005.
Maxim Beliakov (CRD:# 5968432) is a former registered broker whose last employer was Garden State Securities, Inc. (CRD#:10083) of Red Bank, NJ, Woodstock Financial Group, Inc. (CRD#:38095) of Staten Island, NY, and Chelsea Financial Services (CRD#:47770), also of Staten Island. He has been in the industry since 2011.
Both brokers worked for Woodstock Financial Group, Inc., at the same time. Both were discharged on the same day, 12/2/2019, after allegations of churning a customer’s account, which is excessive trading to generate commissions. The matter originated from a firm examination at Woodstock as well as a client complaint.
The customer dispute was filed on 8/28/2017, when the customer filed a complaint with allegations of: “Starting when the account transferred to WFG in May 2013 client alleges churning and excessive trading, unsuitability, violation of minn. insurance statutes, breach of contract, violations of the federal and state securities laws, negligence, fiduciary duty, fraudulent misrepresentation and negligent misrepresentation, common law fraud, and consumer fraud.” The client requested damages of $975,727, and the firm settle the claim for $60,000.
In the broker’s comments, Stazzone noted that the firm settled the claim and dismissed the case against him prior to settlement. The client claim was only filed against Stazzone, who also has five additional disclosures for tax liens totaling $174,235.29.
However, both brokers faced FINRA disciplinary actions, leading to AWC letters (Acceptance, Waiver & Consent.) These letters included sanctions of a $5,000 fine and a four-month suspension for both Stazzone and Beliakov.
According to the AWC letters, both brokers made recommendations that led to the client paying more than $176,000 in commissions from 9/2017 through 8/2018, when they worked together at Woodstock. Both engaged in “quantitatively unsuitable trading” on behalf of a 57-year-old customer who had little experience in securities trading. The client used money from cashed-in savings bonds to fund his brokerage account.
Stazzone and Beliakov had “de facto control” over the customer’s account and made recommendations that the customer followed. This led to an annualized cost-to-equity ratio of 221.56, meaning that the customer’s account would have to increase by at least 221% in order to break even. The transactions recommended by Stazzone and Beliakov were excessive and considered unsuitable for the client’s investment profile.
Both brokers are on suspension until 1/6/2022 and are required to pay a fine of $5,000 in order to return to working with a FINRA member broker-dealer.
According to investor.gov, which is maintained by the Securities and Exchange Commission, a broker typically earns a portion of the commissions or other fees on each purchase or sale of securities that the brokerage firm makes for an investor. When a broker engages in excessive buying and selling (i.e., trading) of securities in a customer’s account without considering the customer’s investment goals and primarily to generate commissions that benefit the broker, the broker may be engaged in an illegal practice known as churning.
Red flags of excessive trading may include:
Unauthorized Trading – Be alarmed if you become aware of trades in your account that you did not authorize your broker to make.
Frequent Trading – Be wary of frequent in-and-out purchases and sales of securities that don’t seem consistent with your investment goals and risk tolerance.
Excessive Fees – Be suspicious if the total amount of fees seems high or if one segment of your portfolio consistently generates high fees.
Did You Invest With Alphonse Stazzone Or Maxim Beliakov?
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