Securities Arbitration Lawyer Blog
On August 3, 2021, the Financial Industry Regulatory Authority (“FINRA”) and former Joseph Stone Capital L.L.C. stockbroker Eugene McAdams entered into a Letter of Acceptance, Waiver, and Consent No. 2020066887801 whereby Mr. McAdams consented to a bar from the securities industry. Mr. McAdams consented to the expulsion after refusing to cooperate with a FINRA investigation into whether he made suitable investment recommendations to customers while registered with Joseph Stone Capital.
Mr. McAdams, associated with Joseph Stone Capital from September 2015 to June 2020, has also been the subject of at least two customer complaints. The causes of action of the two complaints, which resulted in monetary compensation to the customers, included excessive trading on margin, elder abuse, false and misleading statements, fraud, negligent misrepresentation, breach of fiduciary duty, and unauthorized trading.
If you have suffered financial losses investing with Eugene McAdams or Joseph Stone Capital L.L.C., or suspect that Mr. McAdams did not have your best interest in mind when recommending investments or making account transactions, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your legal rights.
Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Joseph Stone Capital.
Joseph Stone Capital L.L.C.
According to a 2017 investigation by Reuters, out of all of the brokerage firms in the country, Joseph Stone Capital hired the second most brokers with a history of significant disclosures. In 2021, Iorio Altamirano LLP set out to update that analysis.
The investigation revealed that seventy-six percent (76%) of Joseph Stone Capital’s brokers and supervisors have significant red flag public disclosures. Significant red flag disclosures include:
- regulatory sanctions,
- terminations of employment after allegations of misconduct,
- customer disputes that result in an award or settlement, and
- prior association with a firm that FINRA has expelled.
You can read the full investigative report here: Investigative Report: Iorio Altamirano LLP Investigation into Joseph Stone Capital L.L.C. Reveals Troubling Pasts for Owners, Executives, and Brokers
FINRA Letter of Acceptance, Waiver, and Consent No. 2020066887801
Eugene McAdams and FINRA entered into a Letter of Acceptance, Waiver, and Consent on August 3, 2021, after Mr. McAdams refused to appear for on-the-record testimony connected with FINRA’s investigation. The investigation concerned the suitability of Mr. McAdam’s recommended securities transactions in customers’ accounts while registered through Joseph Stone Capital.
On July 7, 2021, in connection with FINRA’s investigation, FINRA sent a request to Mr. McAdams for on-the-record testimony pursuant to FINRA Rule 8210. On July 7, 2021, Mr. McAdams responded by email that he would not appear for on-the-record testimony at any time.
By refusing to testify, Mr. McAdams violated FINRA Rules 8210 and 2010.
Financial Advisor Eugene A. McAdams (CRD No. 4190211)
Eugene A. McAdams had 19 years of experience in the securities industry and had been associated with 14 different firms, including three firms that have been expelled from the industry by FINRA.
Mr. McAdams has also been the subject of at least two customer disputes:
- Customer Dispute (June 2018): A customer filed a securities arbitration complaint alleging $150,000 in damages as a result of excessive and unnecessary trading on margin, elder abuse, false and misleading statements, fraud, negligent misrepresentation, and breach of fiduciary duty. McAdams denied the allegations but settled the matter for monetary compensation.
- Customer Dispute (February 2004): A customer alleged that Mr. McAdams made unauthorized transactions that resulted in $80,000 in damages. McAdams and Milestone Financial Services, Inc., the firm that employed Mr. McAdams at the time of the alleged conduct, settled the matter for $60,000.
FINRA’s BrokerCheck tool can be used to obtain Mr. McAdam’s complete and updated disclosure reports.
Joseph Stone Capital – A Duty to Supervise
Financial institutions like Joseph Stone Capital must properly supervise financial advisors and customer accounts. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as excessive trading, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.
How to Recover Financial Losses or Obtain a Free Consultation
If you have suffered investment losses with Eugene McAdams or Joseph Stone Capital or suspect other inappropriate activity occurred in your investment or retirement account, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (855) 430-4010 for a free and confidential review of your legal rights.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.