David Melilli (David John Melilli, CRD# 5254172) is a former broker who recently worked for Cambridge Investment Research, Inc. (CRD# 39543), LPL Financial LLC (CRD# 6413), and SagePoint Financial, Inc. (CRD# 133763), all in Moorestown, NJ.
Melilli had been in the industry since 2006, and also worked for Janney Montgomery Scott LLC, Morgan Stanley & Co., Inc, and Lincoln Financial Advisors Corporation.
David Melilli, Moorestown, NJ, Sagepoint Financial
David Melilli has three disclosures on his publicly-available FINRA BrokerCheck report:
February, 2020: A customer dispute alleged “Unauthorized trading, breach of fiduciary duty, unsuitability, negligence, common law fraud, 10(b) violation and churning alleged.” $140,000 in damages are requested. It is alleged that the customer’s $140,000 account was “wiped out”. The dispute is pending as of this writing.
January, 2020: An employment separation after allegations disclosure states that Cambridge Investment Research, Inc. discharged Melilli for an allegation that “Representative placed discretionary trades without authority.” A statement from the Melilli reads “At the start of a transition to my new broker dealer and RIA, I completed the incorrect new account paperwork for a client. The account was opened as a non-discretionary commission account instead of a discretionary managed account. I was not aware of the mistake until after the fact and was under the impression I completed the paperwork correctly. I marked the trade ticket as discretionary because I was not aware of my mistake. The trade was made to generate routine monthly income – the process was successful, however done in the wrong account type.”
May, 2020: A financial disclosure states that a Melilli paid $1,872 to TD Ameritrade to settle a $2,673 debt.
Allegation Of Churning
The customer dispute against Melilli alleges, among other things, churning. Churning is when a stockbroker buys and sells to generate commissions, and it is a violation of FINRA rules and securities laws. Churning is a leading cause for FINRA arbitration claims. For an arbitration claim involving churning to be successful, the broker has to control the activity in the account and the activity was excessive for the client’s risk tolerance and objectives.
Churning will have a negative impact on your account because of the cost and expense. Most brokerage firms require you to pay a commission or markup based on the number of transactions a stockbroker makes in your account. When excessive trades occur, you are overpaying for unnecessary transactions. Also, a broker who is excessively trading is not acting in your best interest. In fact, their actions are most likely intended to enhance the brokerage firm’s profit and will do little to benefit you, the investor. If a financial advisor excessively trades your account for a commission, they are only looking out for their own profit. Statistically, an account with high costs will not be profitable over the long term.
Did You Invest David Melilli?
Silver Law Group is a nationally-recognized law firm with attorneys experienced in recovering losses for investors in cases of stockbroker misconduct and securities and investment fraud, including churning.
If you have losses related to churning, breach of fiduciary duty, negligence, or other causes, contact Silver Law Group or call at (800)-975-4345 for a no-cost consultation. We take most cases on a contingent fee basis, which means that nothing is owed unless money is recovered for you.