The New Jersey Bureau of Securities has revoked the registration license of First Standard Financial Company, a broker-dealer based in Red Bank, NJ. The move comes in the wake of allegations that First Standard and its representatives engaged in improper short-term trading, causing them to illegally make over $28.7M in sales charges and commissions.
Meantime, there have reportedly been an increase in customer complaints and a “mass exodus” of First Standard representatives from the firm. The state’s securities regulator is accusing the brokerage firm of “pervasive unauthorized, unsuitable, and excessive trading” that cost customers money while “unjustly enriching First Standard and its agents.”
Our brokerage firm misconduct lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) are investigating claims of current and former customers of First Standard Financial Company and its brokers, including former licensed agents Philip Sparacino and Gabriel Block. Please contact us today so that we can help you explore your legal options.
First Standard Accused of Hiring Recidivist Brokers
In court documents that the Bureau filed in Superior Court, the state is accusing the broker-dealer of regularly hiring agents who have been named in previous customer complaints and/or were cited for regulatory issues having to do with excessive, unauthorized, and unsuitable trading. The state is accusing the brokerage firm of serving as a “haven for greedy, dishonest agents,” who, while with First Standard, engaged in “in and out trades,” as well as short-term trading in investments where active trading was not suitable, for the purposes of earning commissions.
Some of these commissions were purportedly so substantial that for clients to “break even,” the trades would have had to earn “extraordinary returns.” New Jersey believes that First Standard was “complicit” in this “unlawful conduct” by its agents and “keenly aware” of their actions.
According to Law360 of December 31, 2018, First Standard had 44 agents registered in the state. However, the registration of broker Philip Sparacino, the “sole remaining producer” at the Red Bank office, was revoked last month. He has been fined $250K by the Bureau for allegedly making costly, fraudulent, and unsuitable trades that resulted in more than $1.4M in fees and commissions–and that was only between April and October 2019. He was a registered First Standard broker for five years.
The Bureau fined another ex-First Standard broker, Gabriel Block, $750K for allegedly employing a fraudulent trading strategy that earned over $1.6M in commissions. He was only with the firm for two years. Not only did New Jersey take back Block’s license earlier this year, but also, the Financial Industry Regulatory Authority (FINRA) barred him from the industry. According to Block’s BrokerCheck record, there are numerous broker misconduct cases pending against him.
Our broker fraud attorneys represent investors throughout the US with claims against negligent brokers and their brokerage firms. SSEK Law Firm has recovered many millions of dollars on our clients’ behalf.
We are currently speaking to First Standard Financial clients who suspect they may have lost money due to being charged excessive commissions or because of other fraudulent or negligent actions. Your first consultation with us is a free, no obligation case assessment.