“This guy has no business operating in Montana.”
HELENA, Mont. – Montana Securities Commissioner Monica J. Lindeen has permanently barred a New York City-based securities salesperson from operating in Montana – a move that could force the man out of the securities industry nationwide.
Joseph Biondolillo agreed last week to a fine and the revocation of his securities license in Montana for allegedly engaging in “churning” – or rapidly buying and selling on behalf of his clients in an effort to generate commissions for himself.
“This guy has no business operating in Montana,” Lindeen said. “Bad actors like Biondolillo give every stock broker a bad name. I don’t want any more Montana victims.”
Biondolillo’s pattern and practice of excessively trading in his clients’ account cost Montanans hundreds of thousands of dollars. His employer, Chelsea Financial Services, last year agreed to pay more than $262,000 in restitution to his Montana clients. Most of the restitution came directly from Biondolillo. Chelsea also paid a fine of $40,000 for allegedly not adequately supervising Biondolillo and also reimbursed Lindeen’s agency more than $11,000 to cover the cost of the investigation.
Montana revoked his broker’s license and forbids him from ever applying for another license here through a permanent bar. The Montana license revocation could effectively end Biondolillo’s career as a securities broker across the nation. A revocation in one state typically results in other states revoking a broker’s license and also could result in a statutory disqualification by the Financial Industry Regulatory Authority (FINRA), a self-regulating organization made up of broker-dealer firms.
Revocation is a particularly harsh penalty reserved for those individuals with a history of reportable disciplinary events. In Biondolillo’s case, he had multiple customer complaints alleging similar bad behavior on his record when he became a Montana-licensed broker in 2010. Biondolillo was also ordered to pay a $10,000 fine.
In January 2013, a Biondolillo client complained to Lindeen’s office about the way he was handling their account. In the course of the subsequent investigation, Lindeen’s office located additional Montana victims across the state. All had similar complaints: Biondolillo made excessive trades in their accounts, driving up commissions and fees for himself. He also rolled safe investments, such as conservative mutual funds, into riskier investments for his own benefit.
Biondolillo did not live in Montana. He was registered to sell securities in the state and had Montana clients, but never lived or operated a business here.