Sanctioned For Failure To Supervise

Anthony Pace of New York New York a stockbroker formerly registered with Windsor Street Capital LP has been fined $5,000.00 and suspended for two months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that he neglected to supervise a stockbroker who executed trades in the accounts of Windsor Street customers. Letter of Acceptance Waiver and Consent No. 2017052475702 (Dec. 3, 2019).

According to the AWC, Pace was responsible for supervising a stockbroker, JA, who serviced the accounts of Windsor Street customers. Because of JA being placed on heightened supervision, additional supervisory controls were put in place for Pace to handle. The heightened supervision plan imposed for JA called for all of his sale and purchase orders to be reviewed by Pace before customers’ transactions were effected. In addition, Pace was tasked with contacting customers to confirm that the transactions JA planned to execute were legitimate.

The AWC stated that there were also written supervisory procedures which Windsor Street maintained concerning churning and excessive trading. These procedures mandated a review of cost-to-equity ratios and turnover rates. Also, Windsor Street was provided with an Active Account Report each month to aid in the review process. These reviews were supposed to be documented. But Windsor Street’s supervisory procedures were disregarded by Pace – he failed to conduct a review of the trades JA submitted, and Pace did not abide by the procedures for churning and excessive trading.

FINRA stated that trades JA placed in the accounts of customers FP and LW lacked proper supervision on Pace’s part. The trades he submitted were not pre-approved. Pace failed to contact customers to confirm the details of the transactions. In addition, the Active Account Report, which detailed activity levels, number of trades and commissions which pertained to the trades, flagged FP’s and LW’s accounts. The AWC stated that the information contained in the Active Account Report showed that JA engaged in excessive trading. In fact, the annual cost-to-equity ratios for the customers’ accounts exceeded one hundred percent, and turnover rates exceeded thirty.

FINRA noted that there were additional red flags pertaining to JA’s trading which Pace failed to address. Specifically, LW’s account documentation showed that the customer’s objective was growth and income, but Pace depended on JA’s assertion of LW’s objective being speculation. Also, Pace was in receipt of one or more e-mails from FP which showed that FP disputed JA’s frequent and aggressive trades. Pace never contacted FP after being copied on those e-mails.

FINRA found that Pace’s conduct was violative of FINRA Rules 2010 and 3110.

FINRA Public Disclosure confirms that Pace is referenced in six customer initiated investment related disputes that concern allegations of his conduct while employed by Global Arena Capital Corp, VFinance Inc., FAS Wealth Management Services Inc., J.P. Turner Company LLC and Biltmore Securities Inc. Specifically, a customer initiated investment related arbitration claim involving Pace’s activities was resolved for $71,008.00 in damages based upon accusations of breach of contract, breach of fiduciary duty, failure to execute and negligence as it pertained to Pace’s recommendations or stock trading during the time that he was associated with FAS Wealth Management Services Inc.

Pace is referenced in another customer initiated investment related arbitration claim which was settled for $60,000.00 in damages supported by allegations that contractual and fiduciary obligations had not been complied with; over-the-counter equity trades failed to be suitable; the customer’s account had been excessively traded and churned; and the customer was defrauded by Pace through his activities at Global Arena Capital Corp and VFinance Inc.

Pace’s registration with Windsor Street Capital has been terminated as of May 29, 2018. On May 21, 2018, he became associated with Joseph Stone Capital LLC. Pace has been employed by at least four different securities broker dealers including Windsor Street Capital who have been expelled by securities regulators for violation of securities laws or who are otherwise defunct.

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