The Financial Industry Regulatory Authority (“FINRA”) has barred stockbroker David Martirosian from the securities industry. Mr. Martirosian was expelled from the brokerage industry for refusing to cooperate with a FINRA investigation into potentially unsuitable and excessive trading and his potential participation in private securities transactions while associated with Joseph Stone Capital L.L.C. (“Joseph Stone Capital”).
Mr. Martirosian, who had only 13 years of experience in the securities industry, had a history of associations disreputable broker-dealers, customer complaints, and tax liens.
Mr. Martirosian was employed by Joseph Stone Capital in New York from July 2016 until April 26, 2021
If you have suffered financial losses investing with David Martirosian or Joseph Stone Capital L.L.C., or suspect that Mr. Martirosian 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
Mr. Martirosian was one of the brokers who had serious incidents reported on his BrokerCheck report.
FINRA Letter of Acceptance, Waiver, and Consent No. 2019063251701
FINRA and Mr. Martirosian entered into a Letter of Acceptance, Waiver, and Consent No. 2019063251701 on April 26, 2021, after Mr. Martirosian refused to cooperate with a FINRA investigation into potentially unsuitable and excessive trading and his potential participation in private securities transactions while associated with Joseph Stone Capital.
On March 22, 2021, in connection with its investigation, FINRA sent a request to Mr. Martirosian for the production of information and documents pursuant to FINRA Rule 8210. On April 6, 2021, Mr. Martirosian, through counsel, stated in an email that he would not provide the requested information or documents at any time.
By refusing to provide the information or documents, Mr. Martirosian violated FINRA Rules 8210 and 2010. Accordingly, FINRA barred him from associating with any broker-dealer in all capacities.
Excessive trading occurs when a financial advisor makes many trades in a customer’s account, not to benefit the customer but to generate commissions for the broker.
Excessive trading is an unethical and illegal practice. It is also a violation of securities rules and regulations and can cause enormous harm to customers.
Financial Advisor David Martin Martirosian (CRD No. 5261144)
David Martin Martirosian had 13 years of experience in the securities industry but a history of associations disreputable broker-dealers, customer complaints, and tax liens.
In 13 years, Mr. Martirosian has been associated with nine different firms, including four firms that have been expelled by FINRA:
- Joseph Stone Capital, L.L.C. in Mineola, New York, from July 2016 to April 2021.
- Spartan Capital Securities, LLC in Garden City, New York, from January 2016 to August 2016.
- Caldwell International Securities from June 2015 to December 2015 (expelled by FINRA).
- Legend Securities Inc. in Oyster Bay, New York, from December 2013 to July 2015 (expelled by FINRA).
- SCF Securities, Inc., from August 2013 to December 2013.
- John Carris Investments LLC in Hoboken, New Jersey, from June 2013 to September 2013 (expelled by FINRA).
- Cape Securities Inc. in Bayside, New York, from June 2011 to May 2013.
- John Thomas Financial in New York, New York, from July 2009 to April 2011 (expelled by FINRA).
- National Securities Corporation in Huntington, New York, from January 2007 to July 2009.
Mr. Martirosian has also been the subject of at least three customer disputes:
- Customer Dispute (November 2017): A customer indicated that he thought he was getting an additional 15,000 shares of Fat Brands Inc. added to his 10,000-share order of the same, at the IPO price of $12.00 in the primary market. Instead, the shares were purchased on the secondary market at a higher price, and the customer was not happy. The customer, firm, and Mr. Martirosian agreed to honor the $12 IPO price. The matter was deemed a settlement of $39,077.15, in which Mr. Martirosian personally contributed $20,000.
- Customer Dispute (June 2015): A customer filed a written complaint to Legend Securities, the firm that employed Mr. Martirosian at the time of the alleged conduct. The complaint related to an equity position. The customer did not file a securities arbitration complaint, instead choosing to complain directly to the brokerage firm. The firm denied the customer any compensation.
- Customer Dispute (October 2010): A customer filed a written complaint to John Thomas Financial, the firm that employed Mr. Martirosian at the time of the alleged conduct. The complaint related to excessive commissions and fees. The customer did not file a securities arbitration complaint, instead choosing to complain directly to the brokerage firm. The firm denied the customer any compensation.
According to Mr. Martirosian’s BrokerCheck report, he has also been the subject of the following IRS tax liens:
- October 29, 2019: $10,628.90.
- November 16, 2016: $14,705.73.
- December 15, 2014: $23,890.
- February 10, 2014: $25,050.
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 David Martirosian 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 firstname.lastname@example.org 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.
**Corrections and Clarifications: June 30, 2021**
- An earlier version of this blog post incorrectly stated that according to a 2017 investigation by Reuters, out of all of the brokerage firms in the country, Joseph Stone Capital hired the most brokers with a history of significant disclosures. 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, not the most.