← Broker database 2025-07-10
Michael Colletti Fined and Suspended Eight Months for Unauthorized Trading
According to FINRA, Michael Ciro Colletti of Glen Head, New York was fined $10,000, suspended from association with any FINRA member firm in all capacities for eight months, ordered to pay $5,417 plus interest in restitution to a customer, and required to requalify by examination before serving as a General Securities Representative.
Colletti appealed the NAC decision to the SEC. The sanctions are not in effect pending that review.
FINRA found that Colletti executed unauthorized trades in a customer's account and engaged in quantitatively unsuitable trading. The findings revealed that Colletti selected which securities to trade and determined the volume and frequency of trading in the customer's account, thereby exercising de facto control over the account.
The customer was in his 60s when he opened the account, was nearing retirement, and the account was an individual retirement account (IRA). He listed his risk tolerance as moderate and his objectives as income and growth—a profile inconsistent with active trading.
Despite this conservative profile, Colletti engaged in a pattern of buying stocks, holding them briefly, and selling them to buy other stocks that were also quickly sold. This pattern continued until the customer closed his account.
The trading resulted in losses of $5,417 for the customer while generating $5,081 in commissions for Colletti. When commissions approach or exceed customer losses, it raises serious questions about whether the trading served the customer's interests or the representative's.
Quantitatively unsuitable trading—also known as churning or excessive trading—occurs when trading frequency and volume are inconsistent with the customer's investment profile and primarily benefit the representative through commissions.
Investors should monitor their accounts for excessive trading and ensure activity aligns with their stated objectives.