Carmine Capone of Fort Lauderdale, Florida and The GMS Group (GMS) of Livingston, New Jersey submitted an Acceptance, Waiver and Consent to the Financial Industry Regulatory Authority for allegedly failing to supervise one of their registered representatives. A FINRA member since 1979, GMS has 7 branch offices and over 100 registered representatives. Mr. Capone has been associated with GMS since August 1985 and is a General Securities Sales Supervisor for the firm.
FINRA found, that between 2011 through 2013 a registered representative, who was supposed to be under Mr. Capone’s supervision, recommended and engaged in several unsuitable trades in ETF’s in four customer accounts. During the relevant period, FINRA found that the registered representative for GMS did not understand the unique features and specific risks of the ETF transactions. All four clients realized thousands of dollars in losses while the GMS representative generated commissions of $210,754. FINRA alleged that the ETF’s were nontraditional and exposed the clients to more risk than they could tolerate.