Joseph Stone Capital Supervisor Joseph Audia Suspended By FINRA
Joseph Audia (Joseph Scott Audia CRD# 2909761) is a registered broker currently employed with VCS Venture Securities (CRD#: 127921) of Hauppauge, NY. His previous employers include Joseph Stone Capital (CRD#: 159744), First Midwest Securities, Inc. (CRD#:21786), and American Capital Partners, LLC (CRD#:119249), also of Hauppauge. He has been in the industry since 1997.
FINRA recently sanctioned Audia after allegations that he failed to supervise a representative in his division while employed with Joseph Stone Capital. The representative continually churned and excessively traded in a specific customer’s account.
The Acceptance, Waiver & Consent (AWC) letter detailed the allegations. During his tenure as branch manager, Joseph Audia received daily trading blotters. He failed to review these blotters, as well as failed to review and investigate instances of excessive trading by one representative. Audia also failed to enforce restrictions placed on the representative after the firm discovered the excessive trading. Two examples of this failure were detailed in the AWC:
- A report issued in March of 2018 indicated that the representative was not allowed to charge commissions in the specific customer’s account during the next quarter. However, Audia allowed the representative to charge the customer markup of $462.50, or 3.62%, on a May 31, 2018, purchase of an equity security, and failed to address the restriction and the amount of trading in this customer’s account.
- In another report provided by the firm in July of 2018, the representative was again prohibited from charging commissions or markups more than 1.5% on purchases in another customer’s account. The representative was also prohibited from charging commissions or markups on sales that would result in a loss for the customer in the next quarter. Even with the restriction, this representative charged the customer markups more than 1.5% on several occasions. In the last week of August of 2018, the customer was charged between 1.52% and 1.88%. The representative also charged this customer $100 commission on four sales that resulted in losses. From October 30th, 2018, through November 5th, 2018, Audia again failed to enforce the firm’s commission restrictions as well as address the amount of trading in the customer’s account. This customer then had a 49% cost to equity ratio during the next quarterly active account report.
Upon discovering that Audia failed to supervise this representative as he was instructed, in violation of FINRA Rules 3110 and 2010, FINRA sanctioned Joseph Audia with:
- A fine of $5,000
- Suspension for two months prohibiting him from any association with any FINRA member broker in all capacities as a principal
- Completion of 20 hours of continuing education for supervisory responsibilities by a FINRA-approved provider. He is required to notify FINRA’s legal counsel within 10 days prior to the training and within 30 days of completion.
Audia’s suspension ended on 3/17/2022, and he is now registered with VCS Venture Securities.
There are two additional customer disputes in Audia’s CRD.
- A customer dispute filed July 16th, 2009, alleged unauthorized trading, suitability, and churning, between May 2005 and July 2006. The client requested damages of $15,538.62, and the claim was settled for $5,000. During the arbitration in 2011, the panel recommended expungement of all references to this claim from Audia’s record. However, Audia was required to obtain confirmation from a court before FINRA would honor the expungement. No additional information is available.
- Another customer dispute dated. January 3rd, 2006, in which a customer alleged negligence, use of margin, suitability, unauthorized trading, and churning. The client requested damages of $50,000 and the claim was settled for $24,000.
A previous customer dispute involving failing to follow instructions with a requested damages amount of $45,000 was denied.
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