According to FINRA, Joseph L. Tranchina of Middletown, New Jersey was fined $5,000, suspended from association with any FINRA member in all capacities for five months, and ordered to pay $60,975 plus interest in restitution to customers.

Tranchina willfully violated Regulation Best Interest by recommending excessive trades to two retail customers. Both accounts had investment objectives of speculation, but the trading far exceeded what was appropriate.

The first customer, then a 65-year-old judge, experienced an annualized turnover rate of eight and an annualized cost-to-equity ratio of 32 percent. Tranchina generated $49,645 in commissions while causing $74,331 in realized losses.

The second customer, then a 54-year-old small business owner, relied on Tranchina's advice and routinely followed his recommendations. This account experienced a turnover rate of 21 and a cost-to-equity ratio exceeding 90 percent. The trading generated $11,330 in commissions and caused $23,818 in realized losses.

A cost-to-equity ratio of 90 percent means the account would need to earn 90 percent returns just to break even after paying commissions—an extraordinary hurdle that makes profitable investing nearly impossible.

The traditional guideposts for excessive trading are a turnover rate of six and a cost-to-equity ratio of 20 percent. Both customers' accounts substantially exceeded these thresholds, demonstrating clear excessive trading.

Even when customers agree to speculative objectives, brokers must ensure trading is in customers' best interests, not just a mechanism for generating commissions.

The suspension is in effect from June 2 through November 1, 2025.

Investors should understand the cost-to-equity ratio in their accounts and compare trading metrics to industry guideposts.