According to FINRA, Michael Joseph Dugan of Staten Island, New York was suspended from association with any FINRA member in all capacities for seven months for willfully violating Regulation Best Interest by recommending excessive, unsuitable trades that were not in customers' best interests.

The customers—a retiree and a 65-year-old—relied on Dugan's advice and routinely followed his recommendations. This reliance gave Dugan de facto control over their accounts, meaning he effectively controlled trading decisions even without formal discretionary authority.

Dugan's trading in these accounts generated $143,217 in total commissions while causing $216,772 in realized losses for the customers. This pattern—substantial commissions combined with customer losses—is a hallmark of excessive trading, sometimes called "churning."

Excessive trading occurs when a broker trades in a customer's account primarily to generate commissions rather than to benefit the customer. Key indicators include high turnover rates (how frequently the portfolio is replaced), cost-to-equity ratios (what percentage return the account must achieve just to cover trading costs), and in-and-out trading of the same or similar securities.

Regulation Best Interest requires broker-dealers to act in the best interest of retail customers when making recommendations. Recommending trades that primarily benefit the broker through commissions while harming the customer through losses and transaction costs violates this fundamental obligation.

No monetary sanction was imposed due to Dugan's financial status, but the seven-month suspension removes him from the industry during that period.

The suspension runs from May 5, 2025, through December 4, 2025.

Investors should monitor their accounts for excessive activity and understand that high trading volume often benefits brokers more than customers.