Securities Lawyers Blog
The securities attorneys at Gana Weinstein LLP are currently investigating Joseph Stone Capital L.L.C. (Joseph Stone) broker Miguel Murillo (Murillo). According to BrokerCheck Records, Murillo has been subject to three customer disputes, one of which is still pending. In addition, Murillo has been sanctioned by the Financial Industry Regulatory Authority (FINRA) for being in violation of various securities laws.
In September 2017, a customer alleged that Murillo engaged in recommending unsuitable investments, executing unauthorized transactions, excessively trading the account, and security fraud. The customer has requested $800,000 in damages. This dispute is currently still pending.
In August 2008, a customer alleged that Murillo failed to follow customer instructions and engaged in unauthorized trading and false representation of the nature of the investments recommended. The case settled at $35,000.
Murillo has also been suspended by FINRA for violating certain securities laws. In December 2010, FINRA found that Murillo was in violation of NASD Rules 2110 and 2310 for recommending unsuitable investments to inexperienced, elderly investors. The investment recommendations were alleged to have not matched the investor’s financial needs and objectives. The customer had stated a desire for a conservative retirement account with low risk and passive income and instead FINRA found that Murillo listed the customer’s objective as speculation and risk tolerance as aggressive. In addition, many of the trades that Murillo executed were excessive and were made on use of margin when the investor had been completely uninformed about the use of margin and its risks. Without admitting or denying the allegations, Murillo consented to the described sanctions and to the entry of the findings. Murillo incurred a restitution fee of $35,000 and was suspended for 20 business days.
Brokers must make recommendations that are suitable for their client. First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives.
Trading on margin can be an extraordinary risky practice and occurs when the investor borrows funds from the brokerage firm to make investments. If the account value falls below the maintenance margin (minimum account balance) or the brokerage firm believes the securities are at risk at falling below the maintenance margin, the firm can require investors to either deposit additional funds to the account or make a margin call. In the case of a margin call an investor’s entire position can be wiped out.
Murillo entered the securities industry in 2005 and has been registered with Joseph Stone since November 2014. From April 2010 to November 2014, Murillo was registered with Salomon Whitney Financial. From July 2009 to April 2010, Murillo was registered with Cape Securities, Inc. From September 2007 to July 2009, Murillo was registered with Aura Financial Services, Inc. From March 2007 to July 2007, Murillo was registered with Westpark Capital, Inc. From October 2005 to March 2007, Murillo was registered with National Securities Corporation. From September 2005 to October 2005, Murillo was registered with Aura Financial Services, Inc.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of unsuitable recommendations and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover