According to FINRA, Richard Joseph Perlongo has been fined $5,000, suspended from association with any FINRA member in all capacities for three months, and ordered to pay $18,925 in restitution to a customer for excessively and unsuitably trading the customer's account.

The customer relied on Perlongo's advice and routinely followed his recommendations. As a result, Perlongo exercised de facto control over the account. He recommended frequent in-and-out trading even when the price of recommended securities did not materially change.

Due to Perlongo's recommendations, the customer paid $18,925 in commissions and suffered $70,107 in realized losses.

Excessive trading, also known as churning, occurs when a broker engages in transactions primarily to generate commissions rather than to benefit the customer. The hallmarks of excessive trading include high turnover rates, significant commission costs, and in-and-out trading patterns where securities are purchased and sold in rapid succession.

This case demonstrates how de facto control can occur even without formal discretionary authority. When a customer routinely follows a representative's recommendations without question, the representative effectively controls the account and bears responsibility for ensuring trading is appropriate.

Investors should regularly review their account statements and compare their total costs (commissions, fees, and losses) against their investment returns. If your costs are consuming a significant portion of your returns or you notice frequent buying and selling of the same or similar securities, you may be a victim of excessive trading.

If you believe your account has been churned, you may have a claim for damages and should consult with a securities attorney.