FINRA Files Complaint Against Michael Venturino After Churning Allegations
Back in 2019, we blogged about broker Michael Venturino (CRD #5872439), the subject of multiple customer disputes totaling $1.6 million. Since then, he has additional disclosures, including two judgements, a bankruptcy discharge, and of course, more customer disputes.
At this writing, Michael Venturino is still registered and employed with Spartan Capital Securities, LLC (CRD#: 146251) of Garden City, NY. He began his broker career in 2010.
In the disciplinary action, FINRA’s investigation found that Venturino exercised de facto control over the accounts of eleven clients while at Aegis and made unauthorized trades in a total of twelve accounts. He made recommendations to the clients of what they should buy and sell as well as unauthorized trading.
Venturino’s clients were all over 50, retired or small business owners who relied on his recommendations and generally followed them. The short list of stocks included biotech and technology companies. The clients were either inexperienced investors or had no investment experience and suffered collective losses of $1 million. Two of these clients are now deceased.
Venturino found these clients through cold calling. In his notes, Venturino incorrectly recorded the clients as those with risk tolerances of “high” or “maximum” and investment objectives of “speculation” or “aggressive growth and income” when they were actually much more conservative. The trades are described as “short-term, in-and-out” trades that generated high commissions.
Michael Venturino executed 913 trades in the customers’ accounts with a total principal value of approximately $32.7 million. Many of these trades were unauthorized, and the high trading costs ensured that the accounts would never become profitable. These clients paid $518,313 in commissions, markups, markdowns, margin interest and other trading costs because of the excess trading and churning. As a result, Venturino received more than $325,000 from his trading in these twelve customer accounts.
Eight customer disputes were filed against Venturino between 9/20/2018 and 2/3/2022, with five involved in the disciplinary action while he was with Aegis. These claims were ultimately settled by Aegis.
On 3/31/2020, Venturino was issued a tax lien of $3,874.00. A previous tax lien was issued on 10/19/2018 for $406,984.00. On 10/30/2020, he had a balance of $232,826.00 from this lien after establishing a payment plan.
According to the disciplinary petition, Michael Venturino was the sole provider for his family, with over $5,000 in monthly expenses. Additionally, he owed the IRS $140,000 in back taxes, as well as $30,000 in state back taxes to New York. He then entered repayment plans for both judgments. Venturino filed for Chapter 7 bankruptcy in January of 2019, seeking to have $1.2 million in debts discharged, which was granted on April 10, 2019.
Prior to his bankruptcy filing, Venturino was suspended by FINRA for failing to comply with an award on 7/17/2018. However, a claimant in the arbitration had no intention of arranging installment payments, and Venturino requested that the suspension be lifted, which FINRA then completed on 7/18/2018.
Michael Venturino was involved in previous customer disputes, many of which included similar allegations of unsuitability, unauthorized trading, churning, breach of fiduciary duty, and other misconduct. In all cases, he denied the allegations, although four saw financial settlements by the firms.
Did You Invest With Michael Venturino?
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