A broker was fined and suspended by the Financial Industry Regulatory Authority over allegations of excessive and unsuitable trading, according to Financial Advisor IQ.
FINRA took the enforcement action against Sebastian Wyczawski for infractions while he was registered with Joseph Stone Capital. According to a letter of Acceptance, Waiver and Consent, Wyczawski placed 20 trades on the account of one of his customers from June 2016 to January 2017. This resulted in an annualized turnover rate of over 17 and a cost-to-equity ratio of over 34%. FINRA’s guidelines indicating the possibility of excessive trading are when the turnover rate – the number of times a portfolio of securities is exchanged for another portfolio of securities – is over 6, and the cost-to-equity ratio is over 20%. In this particular case, FINRA said the customer’s account would have had to grow by more than 34% annually just to break even.
Wyczawski also was accused of excessive and unsuitable trading for placing 45 trades in the account of another customer between September 2016 and September 2017.
He did not admit or deny the authority’s findings, but agreed to a suspension of five months and a fine of $5,000, along with restitution of $21,644 plus interest.
Wyczawski departed Joseph Stone Capital in September for his current position with VCS Venture Securities.
At Lewitas Hyman, we represent clients nationwide who are the victims of unauthorized trading, breaches of fiduciary duty and other forms of financial adviser misconduct and securities fraud. If your financial adviser made trades without your consent, you may be able to pursue a lawsuit to recoup your losses. We’ll help you understand your rights and options. Contact our Chicago unauthorized trading attorneys at (312) j291-4600 or online to learn more.