Haselkorn & Thibaut, P.A., operating as Investment Fraud Lawyers, reviews significant FINRA enforcement actions so investors can spot misconduct and understand their recovery options. On June 17, 2026, FINRA accepted an Offer of Settlement from Reid & Rudiger LLC and four of its associated individuals. The case describes a years-long pattern of churning and excessive trading that cost customers millions.
Who were the respondents
Reid & Rudiger LLC was a FINRA-member broker-dealer based in Pennsylvania. The firm primarily served retail customers through two branches and employed nine registered representatives. Evermore Holdings, LLC owned the firm, and Marc Harrison held approximately 98% ownership of Evermore Holdings.
The four individuals named in the settlement are:
- Edward J. Rudiger Jr., CRD 2118724, the firm’s chief executive officer and a general securities principal.
- Clifford R. Reid, CRD 1905920, a registered representative and investment banking representative.
- Marc Harrison, CRD 1605568, majority owner, registered principal, and supervisory principal.
- Kelli A. Mezzatesta, CRD 4701170, the firm’s chief compliance officer.
On April 30, 2026, the firm filed a Form BDW requesting withdrawal of its FINRA membership. On June 1, 2026, FINRA cancelled Reid & Rudiger’s registration for failure to pay fees. The firm also filed Uniform Termination Notices for Securities Industry Registration (Form U5) for each respondent on April 30, 2026.
The high-volume market-timing strategy
From February 1, 2018, through October 31, 2023, Rudiger and Reid recommended a high-volume, high-cost market-timing strategy to customers. The representatives cold-called prospective customers and pitched the firm’s purported expertise in large-company equities.
Marc Harrison would identify stocks within a sector based on his analysis of fundamentals and technicals. Rudiger and Reid then recommended that customers sell out of positions after short periods, sometimes within one to three months and occasionally after only one or two days, to buy different stocks based on new research.
The firm charged commissions of roughly 2% to 4% on both purchases and sales, plus a $99 service charge per trade. The average principal per trade in the Rudiger accounts exceeded $100,000, with individual trades surpassing $1 million. Reid’s average principal per trade exceeded $50,000, with some trades above $200,000. Because the strategy relied on frequent round-trip transactions, the commissions made it virtually impossible for customers to profit.
Customer harm in numbers
| Metric | Rudiger accounts | Reid accounts |
|---|---|---|
| Relevant period | Feb 2018 – Oct 2023 | Feb 2022 – Oct 2023 |
| Customer accounts involved | 15 | 5 |
| Accounts also churned | 5 | 3 |
| Annualized turnover range | 6.92 to 17.33 | 8.46 to 16.76 |
| Cost-to-equity ratio range | 34.85% to 111.59% | 46.52% to 73.95% |
| Customer trading losses | ~$2 million | ~$700,000 |
| Customer costs (commissions/markups) | Over $2 million; firm earned ~$1.87 million in commissions | Over $149,000 in markups and markdowns |
| Average commission per trade | ~$3,470; up to $10,200 | ~$1,220; up to $10,800 |
What FINRA concluded
FINRA found that the trading strategy was unsuitable before June 30, 2020, and not in customers’ best interest after Regulation Best Interest took effect on June 30, 2020. Rudiger and Reid acted willfully and with scienter in churning eight customer accounts after that date. The firm, Rudiger, and Reid willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Regulation Best Interest Rule 15l-1, and FINRA Rules 2111 (suitability), 2020, and 2010.
Supervisory failures at the firm
FINRA also found that Reid & Rudiger failed to establish and maintain a supervisory system reasonably designed to detect churning and excessive trading. Kelli Mezzatesta, as chief compliance officer, and Marc Harrison, as designated supervisory principal, had direct responsibility for supervising Rudiger and Reid under the firm’s written supervisory procedures.
Neither supervisor requested or reviewed exception reports, nor did they calculate cost-to-equity ratios or turnover rates for any of the accounts. The written procedures listed those metrics as relevant to suitability analysis but did not require their use when supervising for quantitative suitability. Edward Rudiger, as chief executive officer, knew or should have known about these supervisory gaps but took no meaningful corrective action.
As a result, the firm, Rudiger, Mezzatesta, and Harrison violated FINRA Rules 3110 and 2010. The firm also violated the compliance obligation of Regulation Best Interest from June 30, 2020, through October 31, 2023.
FINRA sanctions
| Respondent | Sanction |
|---|---|
| Reid & Rudiger LLC | Expulsion from FINRA membership; no monetary sanctions because of expulsion |
| Clifford R. Reid and Edward J. Rudiger Jr. | Bar from association with any FINRA member in all capacities; no monetary sanctions because of the bar |
| Marc Harrison and Kelli A. Mezzatesta | Three-month suspension from association in principal capacities; $5,000 fine each; 20 hours of continuing education in supervision within 90 days of reassociation |
Warning signs for investors
Investors can protect themselves by watching for common signs of churning and excessive trading:
- Frequent buy-and-sell recommendations for large, well-known stocks over short periods.
- Commissions or markups that consume a large share of each trade.
- A broker who recommends selling a recently purchased security to buy another similar security.
- Consistently declining account value despite a high volume of activity.
- A firm that relies on cold calls to recruit new customers.
Investors should review their quarterly statements and use FINRA BrokerCheck to look up a broker’s CRD number, employment history, and disciplinary record.
What investors can do after losses
Customers of Reid & Rudiger who lost money because of churning or excessive trading may be able to recover losses through FINRA arbitration. Claims can be brought against the registered representatives and the firm that failed to supervise them. Our firm reviews these cases at no upfront cost and works on a contingency basis.
Investors can call Haselkorn & Thibaut at 1-888-885-7162 or visit investmentfraudlawyers.com for a free case evaluation. Past results do not guarantee future outcomes, and each case depends on its specific facts.