The White Law Group is investigating potential securities claims involving Cantella & Co. (CRD#: 13905, Malden, MA)
Cantella & Co, headquartered in Boston, MA, is a national financial advisory firm. According to its FINRA Broker Report, the firm reportedly has 30 disclosure events on its broker record including 18 regulatory events, 6 arbitrations and 1 civil event.
Cantella & Co. – Regulatory Events
March 2019 – The Securities and Exchange Commission filed a Cease and Desist order against Cantella & Co. on March 11, 2019 over alleged breaches of fiduciary duty and inadequate disclosures, in connection with its mutual fund share class selection practices and the fees it received.
Between January 1, 2014 to November 26, 2018 the firm reportedly purchased, recommended, or held for advisory clients mutual fund share classes that charged 12b-1 fees instead of lower-cost share classes of the same funds for which the clients were eligible. The firm was censured and paid more than $900,000 in disgorgement plus interest to affected investors.
February 2016 – The Securities and Exchange Commission charged Cantella & Co.with making misstatements to its advisory clients by advertising F-Squared’s overstated AlphaSector performance track record. AlphaSector was FSquared’s sector rotation strategy that invested in certain exchange-traded funds (ETFs) that together made up the industries of the S&P 500 Index. In December 2014, F-Squared admitted in a separate SEC settled administrative proceeding that its AlphaSector advertisements falsely claimed that its AlphaSector strategy had a performance history dating back to April 2001 and outperformed the S&P 500 Index for several years.
An SEC investigation found that Cantella accepted F-Squared’s exceptional performance claims and passed those claims on to Cantella’s own clients without obtaining sufficient documentation that substantiated F-Squared’s advertising claims. Cantella consented to the entry of the order findings and agreed to pay a $100,000 penalty.
September 2014 – FINRA censured and fined Cantella & Co. $50,000 for charging customers excessive commissions on approximately 1,270 equity transactions and 99 options transactions between January 2006 to September 2011. Cantella also reportedly failed to establish, maintain and enforce an adequate supervisory system for the review of commissions charged, as it failed to consider, for each specific transaction, according to FINRA.
Broker Misconduct and Customer Complaints
There have been several cases of registered representatives employed by Cantella & Co.who were allegedly involved in broker misconduct and fraudulent activities.
In September 2019, FINRA began investigating allegations that Cantella & Co. broker Donald Teboe engaged in unsuitable trading while working as a registered representative. Teboe reportedly refused to provide information in the investigation and was barred from the securities industry.
According to his FINRA BrokerCheck report, Teboe was reportedly affiliated with Cantella & Co. in Clinton, MI from July 2014 until February 2018. His broker report indicates that Teboe has one settled customer complaint filed against him in January 2018 for “alleged negligence, breach of contract, breach of fiduciary duty, fraud, and negligent misrepresentation in the sale of various unsuitable, high risk speculative securities between 2012 and 2017.”
Investigating Potential Claims
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
Free Consultation with a Securities Attorney
The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.
If you have concerns regarding investments you purchased through Cantella & Co. and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.