SRO Was Investigating Trading Activity in Customers’ Accounts
The Financial Industry Regulatory Authority (FINRA) has barred Salvatore Pizzimenti from the industry. The ex-Worden Capital Management broker was under investigation for trades made in customers’ accounts. The industry bar came after Pizzimenti refused to give testimony in the self-regulatory organization’s (SRO’s) probe into the allegations.
Salvatore Pizzimenti, a former New York broker, has six disclosures on his BrokerCheck record. Aside from the bar, the other five are customer disputes.
Our New York broker fraud attorneys are speaking to former and current customers of Salvatore Pizzimenti who may have suffered significant investment losses. Contact Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) today.
Ex-Worden Capital Management Broker Facing Unsuitability and Churning Claims
Pizzimenti has numerous customer disputes on his Brokercheck record dating back to 2008. Several of these claims have already been settled, yet all noted allegations of unsuitability, excessive trading, and churning. Most recently, an investor is seeking up to $90K in damages after the former Worden Capital Management broker acted negligently.
Below, are the customer disputes that Pizzimenti has been named in:
- 1/2021: Alleging quantitative suitability, unsuitability, churning, and misrepresentations, this customer is seeking nearly $90K in damages.
- 1/2013: This churning and unsuitability claim was settled for $7K.
- 8/2012: Alleging breach of fiduciary duty, excessive markups and markdowns, negligence, unsuitable trades, and churning, these claimants received a $240K settlement.
- 7/2012: This negligence and breach of fiduciary duty case concluded with a $50K settlement.
- 4/2008: This investor fraud claim sought $5K in damages. They received a $130K settlement.
Salvatore Pizzimenti was a Worden Capital broker from 2016 to 2019. Other firms where he has been registered include Legend Securities, J.P. Turner & Co., National Securities Corporation, Pointe Capital, Great Eastern Securities, and Salomon Grey Financial Corporation.
Worden Capital Ordered to Pay Over $1.5M for Churning by Brokers
Salvatore Pizzimenti is not the only Worden Capital Management broker accused of churning. In December 2020, FINRA ordered the broker-dealer to pay more than $1.5M because some of its brokers had made excessive trades in client accounts. The SRO found that the firm failed to properly supervise its registered representatives, which purportedly made churning possible.
The brokerage firm is also accused of disregarding red flags that indicated excessive trading. Among the customers harmed was one investor who lost over $1M through 635 trades made in their account between 2015 and 2017.
What is Churning?
Investor.gov defines churning as what happens when a broker excessively trades in a customer’s account for the main purpose of earning commissions rather than because the buying/selling is in line with the client’s investment objectives, investment portfolio, and risk tolerance level. Churning is illegal and costs investors money.
Below, SSEK Law Firm Partner and securities attorney, Kirk Smith, talks about this act of broker fraud:
While sophisticated investors can be known to engage in a higher frequency of trading in their accounts, most retail investors don’t usually have that much activity going on in their brokerage accounts. Consider these two red flags as possible signs of churning:
- You notice an unusual number of trades occurring in your brokerage account.
- Your financial advisor can’t come up with a logical explanation for why they are trading so often in your account.
Recoup Investment Losses As a Result of Broker Negligence with Legal Aid
If you suspect that you are the victim of churning, please contact SSEK Law Firm right away so that we can help you determine whether you have grounds for a claim. Our churning and excessive trading lawyers represent investors nationwide in recouping their losses. We’ve recovered many millions of dollars on our clients’ behalf.