The Financial Industry Regulatory Authority (“FINRA”) has barred Joseph Stone Capital, LLC representative Erik Pica following findings that Pica took a 76-year-old customer’s $200,000, and used the money to purchase a house for himself.
According to FINRA’s findings, in 2019, Pica suggested to the customer that he should invest in pre-initial public offering (pre-IPO) shares of a technology company. Pica directed the customer to transfer the $200,000 investment amount from the IRA Account to Pica’s personal bank account “to make the funds available to invest.” The customer acted as instructed.
FINRA states that five months later, the customer asked Pica what happened to his $200,000 check, and Pica replied that he placed the amount back into the IRA account, and then changed his excuse claiming that he had not cashed the check.
Without the customer’s knowledge, Pica deposited the funds into the bank account of a company he controlled, transferred the funds to his personal bank account, and used the funds to make a down payment for a home in New Jersey, according to FINRA.
The FINRA findings expressed that:
- Pica violated FINRA Rules 2150 and 2010 by misusing and commingling the customer’s funds by using the funds to pay the down payment for the home.
- Pica violated FINRA Rule 2010 by providing false and misleading information to the customer and by providing similar false and misleading information to the firm.
- Pica violated FINRA Rules 8210 and 2010 by:
- giving false and misleading information to FINRA during an onsite examination by falsely claiming that he had not entered the branch office or his personal office the previous evening while FINRA was absent.
- providing false and misleading on-the-record testimony on several topics.
- failing to produce documents and information requested by FINRA including the mortgage application regarding the New Jersey home.
Because of his misconduct, Pica was barred from association with any FINRA member in all capacities and ordered to pay $200,000 in restitution, plus interest to the customer.