On January 11, 2022, the Financial Industry Regulatory Authority announced sanctions against John Michael Lopinto (CRD#: 4563735). The sanctions stem from allegations that Lopinto engaged in excessive and unsuitable trading in at least five customer accounts and improperly exercised discretion in another customer’s account without prior written authorization.
Lopinto worked as a financial advisor with Worden Capital Management, LLC, from November 2016 to November 2019. FINRA states that during this timeframe:
Lopinto worked as a financial advisor with Worden Capital Management, LLC, from November 2016 to November 2019. FINRA states that during this timeframe:LoPinto recommended high frequency trading and his customers routinely followed his recommendations and, as a result, LoPinto exercised de facto control over the customer’s accounts. LoPinto’s trading was excessive and unsuitable given the customers’ investment profiles. As a result of LoPinto’s excessive trading, the customers suffered collective realized losses of $240,331 while paying total trading costs of $205,523, including commissions of $161,706. The findings also stated that LoPinto exercised discretion to effect trades in a customer’s account without prior written authorization. LoPinto charged the customer a total of $21,632 in commissions to place the trades. The customer did not provide written authorization for LoPinto to exercise discretion in the account and LoPinto’s member firm did not accept the account as a discretionary account.
Under the law, brokers are prohibited from making unsuitable and excessive trades in customer accounts and making trades without proper authority. While Lopinto neither admitted nor denied FINRA’s allegations, he consented to a nine-month bar from working in the securities industry and a $7,500 fine. He was also ordered to pay restitution in the amount of $135,333.
Brokerage firms like Worden Capital are required under securities industry rules to monitor trading activity in customer accounts to detect and prevent unsuitable and excessive trading and unauthorized transactions. Brokerage firm customers may be entitled to compensation if it can be shown that a firm failed to take adequate steps to prevent and respond to possible improper trading activity in the customer’s account.
The latest sanctions are not Lopinto’s first run-in with regulators. In September 2020, Lopinto was the subject of a Securities & Exchange Commission cease-and-desist order, which included a public censure and $40,000 fine. The SEC accused Lopinto and another colleague of various violations of the Investment Advisers Act of 1940 relating to Keyport Venture Partners, LLC, an unregistered investment fund. The SEC accused Lopinto of misrepresentations relating to the fund’s purported investment in a pre-IPO offering.
An investigation of Lopinto’s regulatory record also shows a history of numerous tax liens in excess of $350,000.
If you are a former customer of John Lopinto and suspect misconduct in your trading account, contact the investment fraud lawyers at Meyer Wilson for a complimentary case evaluation.