Understanding the Legal Battle of John Santariello, Ex-Stockbroker


The Rise and Fall of John Santariello

I’m sure many of you have heard about the curious case of Mr. John Joseph Santariello. Once upon a time, he was a respected name in the world of stockbroking, operating out of Coram, NY. However, his story took a turn for the worse when he was accused of several wrongdoings, which led to a bar from the industry by FINRA and a series of lawsuits filed by his customers.

Let’s get to the bottom of who John Santariello really is. His career path twisted and turned through firms such as Cape Securities, Arive Capital Markets, Joseph Gunnar & Co., Wilmington Capital Securities, National Securities Corp., and finally, K.C. Ward Financial. Primarily, his expertise laid in the areas of stock brokering and offering financial advice.

Registered with CRD number 5746158, Santariello’s alleged questionable actions didn’t just earn him a negative reputation, but also led to a hefty arbitration settlement of $251,813.

The Tumbling Dice of Deception

The tipping point for Santariello came in August 2019, when he lost an arbitration case to a client of Arive Capital Markets. As a result, a FINRA panel in Minneapolis ruled he must pay $251,213 to the customer.

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Digging deeper, it was revealed that Santariello had engaged in churning and excessive trading of the client’s account, violating Minnesota Financial Planning Law, and made unsuitable investment suggestions. What’s worse is that he reportedly tricked the customer into thinking their money went into a retirement account, when in reality, it was used in a non-retirement account for his own gain through commissions.

Refusing to pay the arbitration award led to FINRA barring him from the financial industry.

FINRA’s Guard Dog Role and the Consequences of Misconduct

FINRA, short for The Financial Industry Regulatory Authority, acts as a sentinel overseeing stockbrokers and brokerage firms. Applying rules like the FINRA Rule 2111- suitability, they aim to protect consumers from unsuitable advice.

This rule mandates that firms and brokers have a solid belief in the appropriateness of their advice for customers. So, it’s no wonder that Santariello, who strayed from this path, was caught and subsequently banned from the industry by FINRA.

Santariello’s downfall serves as a cold reminder of the diligent oversight by bodies like FINRA and the serious repercussions for overlooking client welfare.

As the dust settles on Santariello’s broker career, we’re reminded of the wise words of Warren Buffett: “It takes 20 years to build a reputation and five minutes to ruin it.” This story underscores the importance of trust and transparency in finance—be watchful and informed to avoid becoming an unintended casualty of financial malpractice.

Always remember, you can check a financial advisor’s history through their FINRA CRM number. FACT: Over 7% of financial advisors have been disciplined for misconduct. It’s essential to do your homework when choosing an advisor to avoid becoming part of this statistic.

To wrap up, Santariello’s journey is a stark lecture on the significance of ethical practices in finance. The potential consequences of bad financial advice can be devastating. I urge you to ensure that you check the background of any financial advisor you consider working with. Take the time to look up their FINRA BrokerCheck profile—it’s a step that represents your best interests and could save you a lot of trouble down the line.

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