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Stephen Sullivan: FINRA Probes Alleged Churning by Garden City Rep
An investigation into Spartan Capital Securities stockbroker Stephen Sullivan (CRD# 3123249) concerns a “preliminary determination” by the Financial Industry Regulatory Authority that he be sanctioned for alleged excessive trading, churning and unsuitable investment recommendations. FINRA records show that the Garden City, New York representative has also received investor disputes, including one that settled for more than $100,000.
In August 2021 FINRA made a preliminary determination to recommend disciplinary action against Stephen Sullivan in connection to allegations he violated FINRA Rules 2020 and 2010, as well as the Exchange Act. The determination concerns allegations that he churned customer accounts, made excessive trades in customer accounts, and recommended an unsuitable investment strategy to customers. The investigation into this matter remains pending.
Mr. Sullivan’s BrokerCheck report discloses two investor disputes that reached settlements. The most recent, filed in 2021, alleged excessive trading, unauthorized trading, breach of contract, breach of fiduciary duty, unsuitable investment recommendations, and negligence while he was a representative of Newbridge Securities Corporation. The complaint reached a settlement of $30,000. A Broker Comment on the complaint’s disclosure states that he was not named in the complaint, and that the claims took place before he joined the firm.
A second complaint, filed in 2019, alleged that as a representative of SW Financial, he engaged in excessive trading, unauthorized trading, unsuitable transactions, fraud, negligence, breach of contract, and breach of fiduciary duty. The complaint reached a settlement of $39,998.
In 2016 FINRA sanctioned Mr. Sullivan in a matter concerning allegations of unauthorized transactions. According to a Letter of Acceptance, Waiver, and Consent (No. 2014039219802) issued in February 2016, Mr. he exercised discretion in two customer accounts between January 2011 and July 2012. The AWC Letter states that he discussed potential transactions with the customers, “but exercised his discretion in executing those transactions on future dates,” and did not obtain written authorization front the customers to exercise discretion, nor approval from his firm to execute discretionary trades in the accounts. FINRA found that his actions violated NASD Rule 2510(b) and FINRA Rule 2010, issuing him a fine of $5,000 and a 10-day suspension from associating with any FINRA member firm in any capacity.
According to the Financial Industry Regulatory Authority, Stephen Sullivan holds 23 years of securities industry experience. He has been affiliated with Spartan Capital Securities in Garden City, New York since 2019. His past registrations include SW Financial (Melville, New York; 2018-2019), Worden Capital Management (Melville, New York; 2017-2018), NewBridge Securities Corporation (New York, New York; 2016-2017), and Legend Securities (Miller Place, New York; 2015-2017). His credentials include the passage of three securities industry qualifying exams: the Uniform Securities Agent State Law Examination, or Series 63; the Securities Industry Essentials Examination, or SIE; and the General Securities Representative Examination, or Series 7. He currently holds 25 state licenses. (Information current as of May 10, 2022.)
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