Former Worden Capital Management Advisor Barred from Securities Industry by FINRA
On June 11, 2021, former Worden Capital Management LLC (Worden) financial advisor, Salvatore Pizzimenti (Pizzimenti, CRD# 2879580), was barred from associating with any FINRA-member broker-dealers or other affiliated persons. Specifically, pursuant to a Letter of Acceptance, Waiver & Consent (AWC), Mr. Pizzimenti consented to the industry bar, without admitting or denying any wrongdoing, following his alleged refusal to cooperate with a FINRA Enforcement investigation. As set forth in the AWC, FINRA was conducting an “investigation into Pizzimenti’s trading of customer accounts” and accordingly sent him a request “for on-he-record testimony pursuant to FINRA Rule 8210.” In refusing to appear for such testimony, FINRA Enforcement concluded that Mr. Pizzimenti violated FINRA Rules 8210 and 2010.
Mr. Pizzimenti first entered the securities industry as a stockbroker in 2004 and during the course of his career was affiliated with several brokerage firms. Most recently, from November 2016 until December 2019, he was employed by Worden Capital Management in that firm’s New York, New York office. According to FINRA BrokerCheck, Mr. Aziz has disclosed a total of five customer disputes over the course of his career, including four disputes which resulted in a settlement and one dispute which remains pending as of this writing. Notably, the most recently initiated securities arbitration claim concerns allegations that Mr. Pizzimenti engaged in a pattern of trading that was quantitatively unsuitable.
Excessive trading occurs where (1) a financial advisor exercises control over a customer’s account, and (2) the level of activity in that account is inconsistent with the customer’s investment objectives, financial situation, and needs. Excessive trading constitutes a violation of industry standards under FINRA Rule 2111 (Suitability). In determining whether trading is excessive, the use of certain factors and corresponding statistical formulas is commonplace, including analyzing an account’s turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account.
Furthermore, under applicable FINRA rules, brokerage firms like Worden have a legal obligation to supervise their employees and affiliated persons. Specifically, under FINRA Rule 3110 (NASD Rule 3010), firms like Worden must “establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance” with applicable FINRA rules, in addition to state and federal securities laws. It is critical for broker-dealers to not only establish such a supervisory system, but further to properly maintain their supervision, by among other things, periodically meeting with individual financial advisors to discuss, among other things, the products they are selling and their sales methods, as well as account activity including trading activity relative to a customer’s investment objectives, stated risk tolerance, and financial situation and needs.
In instances where a customer suffers losses due to excessive trading, or account churning, then the brokerage firm may be held liable for any failure to adequately supervise their employee. The attorneys at Giarrusso Law Group LLC have significant experience in working closely with investors to resolve all manner of issues concerning investment losses, including losses suffered due to excessive trading or other misconduct. Investors may pursue a claim to recover monies through securities arbitration before FINRA, or in some instances, through litigation. Investors who wish to discuss a possible claim may contact us by telephone at (201) 771-1115 or by email at info@gialawgroup.com for a no-cost, confidential consultation.