New York-based financial advisor John Cangialosi has consented to the sanctions placed on him by the Financial Industry Regulatory Authority (FINRA) but has neither admitted nor denied them.
The allegations against him were of unsuitable trading in three customer accounts, for which he has been suspended for 9 months by FINRA. This was in September 2021. In addition, he has to pay restitution amounting to $271,622. The sanctions are for his actions during the period he was a broker with Worden Capital Management. He is also required to pay $7,500 as a civil/ administrative fee.
Cangialosi’s record in the industry
In his roughly 19 years in the securities industry, Cangialosi has worked for Joseph Stevens & Co., GunnAllen Financial, JP Turner & Co., Brookstone Securities, Joseph Gunnar & Co., Legend Securities, apart from Worden Capital Management, where he was when the transactions in question took place, and SW Financial, his latest engagement.
Several disclosures are recorded on his BrokerCheck account, going as far back as 2009. Allegations of breach of contract, misrepresentation, and churning feature repeatedly in the complaints filed by customers, apart from several other issues. The chronology of these disclosures:
January 2009 – A case of unauthorized trading; settled for $68K.
February 2009 – Another case of unauthorized trading alleged. He was permitted to resign by JP Turner, his broker-dealer at the time.
April 2013 – On account of his failure to disclose unsatisfied liens/ judgments, several of them, he was suspended for 3 months by FINRA.
February 2015 – Settlement of $50K reached in a case of breach of contract and fraud.
November 2015 – A claim of fraud, negligent misrepresentation, churning, and unsuitability made by the customer; settled for $9,999.
January 2018 – Settlement of $30K reached in another claim of unauthorized trading, negligence, churning and unsuitability, breach of contract and breach of fiduciary duty.
High-frequency trading strategy led to losses
High-frequency trading was a strategy recommended by Cangialosi to a few customers of Worden as per FINRA records. It is believed he had effective control over their accounts as they routinely followed his recommendations.
His high-frequency trading recommendations led to the following, for the customers:
- High turnover rates
- High cost to equity ratios
- Concentrated positions in at least one security for short periods of time
- Loss of money
Losses incurred by the customers aggregated to more than $405K. In addition, the trading costs amounted to $311,229, including$292,657 in commissions.
Are you impacted?
At Haselkorn & Thibaut, P.A., we have been representing investors both in the US as well as overseas, pursuing claims in securities-related cases. We recommend that investors who have a suspicion of being at the receiving end of malpractice-related losses seek legal advice. If you do find that you have been a victim, it is advisable to take expert advice and support from a knowledgeable securities attorney.
Former customers of John Cangialosi who suffered investment losses while working with him are being contacted by our New York-based securities fraud attorneys to pro-actively advise them of this case so that they may be able to review their investments.
To speak with one of our securities fraud attorneys, call us at 1-800-856-3352