In June 2019, a former client of Legend Securities, Inc., its CEO Anthony Fusco (CRD# 2704753), and three defunct New York firm’s registered representatives won a $966,708 award in a FINRA arbitration. The three brokers involved in this case are Brian Decker (CRD# 4565524), Steven Meyer (CRD# 4798400) and Bernardo Misseri (CRD# 2713297). Frank Fusco (CRD# 1233242) and Daren Frances Dorval (CRD# 4324418) were also named on the complaint.
The causes of action included breach of fiduciary duty; churning; fraud; manipulations; misrepresentations and non-disclosures; omission of facts; unauthorized trading; violation of blue sky laws; failure to supervise; negligence; and mark-ups. The causes of action relate to unauthorized transactions of securities in the claimant’s accounts performed in part by associated persons who were not registered in the state of Florida. The FINRA arbitration hearing was conducted in Boca Raton, Florida.
- Legend Securities, Inc. and Anthony Fusco are jointly and severally liable for breach of fiduciary duty, churning, fraud, manipulations, misrepresentations and non-disclosures, omission of facts, unauthorized trading, violation of blue sky laws, failure to supervise, negligence, and mark- ups and shall pay to Claimant the sum of $110,622.95 in compensatory damages.
- Legend Securities, Inc., Anthony Fusco, Decker, Meyer and Misseri are jointly and severally liable for and shall pay to Claimant Florida statutory interest on the above-stated sum from 2012 to 2019 in the amount of $141,073.76.
- Legend Securities, Inc., Anthony Fusco, Decker, Meyer and Misseri are jointly and severally liable for and shall pay to Claimant the sum of $83,890.51 in attorneys’ fees.
- Legend Securities, Inc., Anthony Fusco, Decker, Meyer and Misseri are jointly and severally liable for and shall pay to Claimant the sum of $1,879.15 in costs.
- Legend Securities, Inc., Anthony Fusco, Decker, Meyer and Misseri are jointly and severally liable for and shall pay to Claimant the amount of $300.00 representing reimbursement of the non-refundable portion of the filing fee previously paid by Claimant to FINRA Office of Dispute Resolution.
- Legend Securities, Inc., Anthony Fusco, Decker, Meyer and Misseri are jointly and severally liable for and shall pay to Claimant the sum of $629,241.78 in punitive damages.
The FINRA panel found that Respondents Legend Securities, Inc., Anthony Fusco, Decker, Meyer and Misseri engaged in intentional misconduct and/or were grossly negligent in excessively trading and churning the claimant’s account; improperly recording trades as unsolicited as opposed to solicited on account statements; fraudulently misrepresenting or failing to disclose mark- ups and exorbitant commissions; failing to disclose that Misseri and Decker (who solicited and/or recommended many of the transactions which caused the claimant’s losses) were not registered brokers in Florida; and failing to follow the claimant’s instructions including instructions to close his accounts. In one instance, in a practice discouraged by FINRA rules and regulations, Decker and Misseri convinced the claimant to procure a home equity loan and deposit the proceeds with Respondent Legend for investment.
The FINRA panel also found that Respondent Legend Securities, Inc. and Anthony Fusco, who was president of Legend Securities, Inc., knowingly participated, condoned, ratified and consented to the conduct of its employees, brokers and agents. “The evidence and testimony (including FINRA BrokerCheck®) revealed a disturbing pattern of wrongdoing by Respondent Legend and A. Fusco which has resulted in numerous customer complaints and fines/censures levied by regulators as a result of excessive trading, excessive commissions, failure to follow instructions, knowingly employing unregistered associated persons and brokers and committing fraud in connections with an SEC investigation. In a number of regulatory actions and investigations, Respondent Legend has been cited for its failure to supervise its associated persons and brokers and failure to have an adequate supervisory compliance program in place. Finally, the evidence disclosed that Respondents Legend and A. Fusco have been expelled by FINRA for failure to pay fines and costs.”
Anthony Fusco was the CEO and registered with Legend Securities in New York, New York from 2001 until January 2017, when FINRA expelled the firm and it went out of business.
In November 2018, FINRA barred Anthony Fusco after he consented to the sanction and to the entry of findings that he refused to appear for FINRA on-the-record testimony in connection with its investigation of allegations concerning red flags indicating trading misconduct at his member firm. The findings stated that at all times relevant to the investigation, Fusco was the firm’s chief executive officer and responsible for ensuring that the firm exercised supervision reasonably designed to achieve compliance with the securities laws and FINRA rules.
Decker was registered with Legend Securities in Staten Island, New York from 2009 to November 2016, and then with Worden Capital Management LLC in New York, New York from April 2017 to April 2018. In May 2018, FINRA barred Decker after he consented to the sanctions and to the entry of findings that during FINRA’s investigation into allegations of conversion when he was a registered representative at a member firm, he failed to cooperate with certain requests to provide bank records. The findings stated that Decker failed to appear to provide testimony and to produce information and documents as requested by FINRA.
Decker has also been the subject of 11 customer complaints between 2008 and 2015, according to his CRD report, two of which were closed without action.
Meyer was registered with Legend Securities in Staten Island, New York from 2011 to 2016, and then with Chelsea Financial Services in Tinton Falls, New Jersey from October 2015 to March 2017. Meyer has been the subject of two customer complaints in 2015 and 2015, both of which were awarded damages. In July 2018, the New Jersey Bureau of Securities revoked Meyer’s registration. In October 2017, FINRA barred Meyer after he engaged in churning and unsuitable excessive trading in the accounts of four customers – two of whom were senior citizens. “The findings stated that Meyer exercised controlled these four accounts, and his trading generated the cost to equity ratios ranging from 51.63 percent to 104.58 percent and turnover rates ranging from 12.4 to 42.9. Such high costs and turnover were inconsistent with the objectives of the customers, yet generated steady income for Meyer in the form of commissions or mark-ups or mark-downs, (collectively, “sales charges”). As a result of Meyer’s actions in just over a year, one of the customers suffered losses of $44,074.05, while Meyer generated sales charges of $33,897.41. Also, over the course of nine months, another customer suffered losses of $28,584.63, while Meyer generated sales charges of $18,457.50. Again, over the course of nine months, another customer suffered losses of $42,803.25, while Meyer generated sales charges of $17,215.50. Further, over the course of ten months, another customer had a profit of $308.56, while Meyer generated sales charges of $94,699.42. Consequently, Meyer’s active trading in the four accounts resulted in more than $115,000 in cumulative losses to his customers, while Meyer generated $160,000 in sales charges. Meyer acted with scienter to churn and excessively trade in the customers’ accounts. The findings also stated that Meyer engaged in pervasive unauthorized trading in one of the customers’ account. During 2015, Meyer executed 10 unauthorized transactions in the customer’s account. During 2016, all of the transactions executed in the account were unauthorized, except for four transactions to close the account. Thus, 41 of the 67 trades made in the customer’s account, were unauthorized. This particular customer was the customer with the losses of $44,074.05 to his account, while Meyer generated sales charges of $33,897.41.”
In December 2016, New Hampshire sanctioned Meyer to a $10,000 monetary penalty, $56,124 in restitution, a $100,000 fine and $10,000 in costs related to allegations of “Rapid and excessive trading, unsuitable investments, false confirmations, dishonest and unethical, telemarketing prohibition, failing to abide by customer instructions.”
Misseri was registered with Legend Securities in Staten Island, New York from 2009 to 2016.
In June 2017, Misseri was suspended for three months and was sanctioned to a $10,000 civil and administrative penalty and fine after he was named a respondent in a FINRA complaint alleging that he willfully failed to timely disclose four unsatisfied federal tax liens, three unsatisfied state tax warrants and one compromise with a creditor, which totaled over $335,000, on his Form U4.
Misseri has been the subject of eight customer complaints between 2002 and 2016, two of which were closed without action and one was denied.
Frank Fusco was registered with Legend Securities in New York, New York from 2008 to 2017, and he has been registered with Dawson James Securities, Inc. in New York, New York since February 2017. Fusco has also been the subject of four customer complaints between 2015 and 2016, alleging unsuitability and unauthorized trading, according to his CRD report.
Dorval was registered with Legend Securities in Staten Island, New York from 2009 to 2016. Meyer has also been the subject of six customer complaints between 2006 and 2015, two of which were closed without action.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Legend Securities, Inc. may be liable for investment or other losses suffered by its customers.
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