FINRA Suspends Former Monmouth Capital Rep for Reg BI Violations

The Financial Industry Regulatory Authority suspended Nicholas Michael Caruso after the self-regulator determined he had violated Regulation Best Interest.

According to FINRA, between September 2022 and May 2023, while associated with Monmouth Capital Management LLC, Caruso recommended to two of his retail customers a series of transactions that were “excessive” in light of each customer’s investment profile.

In so doing, FINRA says Caruso “placed his and Monmouth’s interests ahead of the interests of both customers.” At the time of the trading, the customers were in their early sixties, and each had an investment profile reflecting an income of between $100,000 and $200,000 and a liquid net worth of between $200,000 and $500,000. FINRA says the first customer lost approximately $4,500 during this period and paid more than $7,300 in commissions and trade costs. The second customer lost approximately $15,800 during this period and paid more than $6,800 in commissions and trade costs.

FINRA says Caruso’s recommendations for both customers involved a pattern of in-and-out, short-term trading, and Caruso failed to consider the cumulative costs of his trading.

Caruso consented to a three-month suspension from associating with any FINRA member in all capacities.

Caruso first registered with FINRA on May 20, 2022, as a general securities representative through an association with Monmouth Capital Management LLC. On June 5, 2023, Monmouth filed a Form U5 stating that Caruso voluntarily terminated his association with the firm.

On June 5, 2023, Caruso registered with FINRA as a GS through Alexander Capital L.P. On August 17, 2023, that member firm filed a Form U5 stating that Caruso voluntarily terminated his association with the firm as of that date.

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