Todd Anthony Cirella of Laidlaw & Co. Faces $350,000 Arbitration Claim Over Illiquid Investments

FINRA BrokerCheck records reveal a significant pending customer dispute involving Todd Anthony Cirella (CRD #2396336), a registered representative with Laidlaw & Company (UK) Ltd. in New York, New York.

In this recent claim, a customer alleges that after being advised to sign offering documents, the investments were later determined to be illiquid and unsuitable. The claimant is seeking $350,000 in damages. This filing highlights a common issue in the financial industry: the tension between a firm’s duty to recommend suitable products and the high-commission appeal of complex, illiquid alternative investments.

The Problem with Illiquidity and Suitability

Illiquid investments—such as certain private placements, non-traded REITs, or alternative energy funds—cannot be easily sold or exchanged for cash. While they may offer the potential for higher returns, they carry unique risks that are not appropriate for every investor:

• Market Lock-up: Investors may be unable to access their principal for years, regardless of personal financial emergencies.
• Valuation Challenges: Because these securities aren’t traded on a public exchange, their true value can be difficult to track, often remaining “stagnant” on account statements until a loss is realized.
• Concentration Risk: When a significant portion of an investor’s net worth is tied up in illiquid assets, they lack the flexibility to rebalance their portfolio during market volatility.

Prior Disciplinary Action: Excessive Trading and Reg BI Violations

In addition to the pending $350,000 claim, Mr. Cirella’s regulatory record includes a 2023 FINRA suspension. Without admitting or denying the findings, Mr. Cirella consented to sanctions for violating Regulation Best Interest (Reg BI).

According to FINRA, Mr. Cirella recommended a series of trades in a senior customer’s account that were excessive and unsuitable. The metrics of this trading were particularly startling:

• Annualized Cost-to-Equity Ratio: 37.65%. This means the account would have needed to grow by more than 37% every year just to pay the fees and break even.
• Annualized Turnover Rate: 20.39. This indicates a high volume of buying and selling that primarily benefited the broker through commissions rather than the client through growth.
• Restitution: Mr. Cirella was ordered to pay $27,566 in restitution to the affected customer and served a three-month suspension.

Patterns of Risk for Investors

When a broker has a history of “excessive trading” (often called churning) alongside new allegations of “illiquid and unsuitable” recommendations, it may signal a broader failure to prioritize the client’s best interest.

A high cost-to-equity ratio is a mathematical “red flag.” If your account statements show frequent trading and high fees, or if you hold investments you cannot sell, your financial professional may be violating their Fiduciary Duty or Reg BI obligations.

Protecting Your Financial Future

A customer complaint is an allegation and does not prove wrongdoing. However, for investors who have experienced substantial losses, these disclosures provide a roadmap for potential recovery.

If you were a client of Todd Cirella or Laidlaw & Company and suffered losses in illiquid alternative investments or through excessive trading, you may have grounds for a FINRA arbitration claim. This process is designed to help investors recover capital lost due to broker misconduct or supervisory failures.