INVESTORS: VCS Venture Securities broker Adam Maggio was named in a customer dispute alleging various forms of broker misconduct.
Adam Maggio (CRD#: 4177365) is registered as a broker with VCS Venture Securities, where he’s been employed since 2021. Maggio is also registered as a broker with Joseph Stone Capital, where he’s been employed since 2013.
Maggio has seven disclosures on his BrokerCheck report. One customer dispute filed against Maggio was denied with no action taken. Additionally, there were two personal criminal dispositions against Maggio.
January 2022 Customer Dispute
Allegations: Churning, negligence, and unsuitability, failure to supervise, unauthorized trading, breach of fiduciary duty, breach of contract, unjust enrichment, negligent misrepresentation and omissions, lost opportunity damages, and punitive damages.
Damage Amount Requested: $2,087,663.24
Broker Comment: The complaint is without merit and I deny the claims and allegations of improper conduct. I intend to vigorously defend the claims and expect all claims to be denied.
December 2021 Regulatory Judgment
Initiated By: FINRA
Allegations: Without admitting or denying the findings, Maggio consented to the sanctions and to the entry of findings that he failed to reasonably supervise trading in certain customer accounts for potentially excessive activity. The findings stated that Maggio failed to identify red flags of excessive trading. Maggio did not review exception reports that flagged accounts with high commission-to-equity ratios. Instead, Maggio tried to identify excessively traded accounts using his own manual calculations, which compared the commissions charged in an account to the account’s current value, rather than its average net equity, and which often understated the cost-to-equity ratio. On certain occasions, Maggio’s manual review did not identify accounts that had red flags of excessive trading, including accounts with cost-to-equity ratios greater than 20 percent. As a result, certain accounts continued to be actively traded and were charged high commissions. The findings also stated that Maggio failed to reasonably to respond to red flags of excessive trading. On certain occasions, Maggio responded to red flags of excessive trading by restricting the commissions that representatives could charge on individual trades, but he did not limit the aggregate costs and commissions charged to the affected accounts. As a result, representatives could place more frequent trades in a customer’s account and thereby continue to charge customers similar aggregate commissions. Maggio also did not restrict commissions on certain trades where the customer made a realized gain, irrespective of the overall amount of commissions that had been charged.
Resolution: Acceptance, Waiver & Consent (AWC)
Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
Registration Capacities Affected: Any Principal Capacity
Duration: Five Months
Start Date: 1/3/2022
End Date: 6/2/2022
Sanctions: Maggio will attend and satisfactorily complete 20 hours of continuing education concerning supervisory responsibilities.
April 2010 Customer Dispute
Allegations: Excessive trading, unsuitability, misrepresentation, excessive commission, negligence, breach of fiduciary duty relationship and fraud.
Damage Amount Requested: $575,000.00
Settlement Amount: $43,750.00
March 2009 Customer Dispute
Allegations: Client alleged unsuitable and unauthorized trading.
Damage Amount Requested: $150,000.00
Settlement Amount: $14,999.00
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