Todd Kling: FINRA Investigates NYC Joseph Stone Broker

Financial Industry Regulatory Authority (FINRA) records accessed on October 17, 2021 reflect that FINRA has determined to bring disciplinary action against New York City-based Joseph Stone Capital broker/adviser Todd Kling. The investor advocates at MDF Law are interested in hearing from investors with complaints regarding Mr. Kling (CRD# 3034284). Call 212-203-9300 for a free consultation.

FINRA: Todd Kling Accused of “Excessive Trading”

According to Todd Kling’s BrokerCheck report, in August 2021 a FINRA investigation into his conduct resulted in a preliminary determination to recommend disciplinary action against him in connection to allegations he violated FINRA Rules 2111 and 2010 by participating in “excessive trading and quantitative unsuitability.” Mr. Kling denied the allegations in his “Broker Statement” on the disclosure, declaring his intent to “vigorously defend himself against these allegations.” Excessive trading refers to the practice of rapidly buying and selling securities solely to generate brokerage account fees and commissions – not to benefit a customer or to further a legitimate investment strategy.

Kling Defending Allegations

Mr. Kling is defending the allegations and stated the following on his FINRA BrokerCheck report, “Broker denies any and all allegations that he violated FINRA Rules 2111 and/or 2010. Broker intends to vigorously defend himself against these allegations.”

Under FINRA Rule 2111, recommend only transactions or investment strategies for which they have a “reasonable basis to believe” it is suitable for their client. Brokers and investment advisers determine a customer’s suitability by ascertaining their investment profile, a set of information that takes into account the customer’s net worth, income, age, financial situation and goals, investment experience and objectives, risk tolerance, and other factors. FINRA Rule 211 describes three primary suitability obligations:

  1. “reasonable-basis suitability” which requires them to have a reasonable basis to believe an investment recommendation is suitable for sale generally.
  2. “customer-specific suitability” which pertains to the specific customer for which they are making the recommendation.
  3. “quantitative suitability,” which requires brokers who hold “actual or de facto control over a customer account”  to avoid executing a series of transactions that may be “suitable when viewed in isolation” but are “excessive and unsuitable” in aggregate.

New York Based Kling Previously Registered with Royal Alliance

Todd Kling has spent 22 years in the securities industry and has been registered with Joseph Stone Capital in New York City since 2016. His previous registrations include Royal Alliance Associates in New York City (2015-2016); FMSI Advisers in New York City (2011-2015); First Midwest Securities in New York City (2011-2015); Financial Network Investment Corporation in New York City (2007-2011); and First Republic Group in New York City (1999-2007). He has passed four securities industry examinations: Series 65 (Uniform Investment Adviser Law Examination), obtained on August 5, 2010; Series 63 (Uniform Securities Agent State Law Examination), obtained on June 22, 1998; SIE (Securities Industry Essentials Examination), obtained on October 1, 2018; and Series 7 (General Securities Representative Examination), which he obtained on May 30, 1998. He currently holds 31 state securities licenses.

If you have suffered losses investing with New York City-based Joseph Stone Capital broker/adviser Todd Kling, you may be eligible to recover your losses. Contact MDF Law at 212-203-9300 for a free consultation with our experienced investor advocates.

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