Broker Michael August Pellegrino – Complaints & Compensation

Investment Losses with Michael August Pellegrino, Previously Registered Broker

Financial Industry Regulatory Authority’s (FINRA) BrokerCheck reports that previously registered broker Michael August Pellegrino faced sanctions presented by FINRA and is also the subject of multiple customer disputes.

Regulatory Disputes

Reportedly, FINRA initiated action against Pellegrino that resulted in civil and administrative penalties/fines of $10,000, as well as a two-month suspension from associating with any FINRA member in any capacity. The sanctions stemmed from findings that Pellegrino distributed to retail investors a retail communication promoting investment in a short-term, high-yield contract. The communication allegedly omitted material information and contained misleading statements and improper projections of the product’s future performance.

According to BrokerCheck, Pellegrino pooled and distributed investor funds to small businesses as a merchant cash advance, leaving investors to believe that they would receive returns based on a percentage of the merchants’ future revenues.

Projections for returns on the investment ranged between six and 10 percent, and the language in the broker’s communication consistently described the investment with words like “predictable,” “consistent,” and “high yield contract.” The misleading communication failed to hold Pellegrino contractually obligated to distribute any investment returns. Furthermore, the communication suggested the investment was backed by collateral and was risk averse, misleading investors by omitting important risks and features of the investment, including the fact that investors could completely lose their principal and that the investment was automatically renewed and illiquid.

Pellegrino settled the matter by submitting a letter of Acceptance, Waiver & Consent (FINRA case no. 2017055120903). The suspension endured from February 1, 2021 to March 31, 2021.

Customer Disputes Linked With TCM Securities, Inc.

In March 2020, a customer of Pellegrino alleged the broker had caused him to sustain financial damages in the amount of $100,000. Pellegrino reportedly worked with TCM Securities at the time of the alleged misconduct, which, according to BrokerCheck, included:

  1. Unsuitable investment recommendations
  2. Fraud
  3. Negligent misrepresentation
  4. Breach of fiduciary duty
  5. Negligent failure to supervise
  6. Fraudulent concealment

This matter (FINRA Case Number 19-01781), resulted in an award of $75,000 to the claimant.  

Other Disputes Involve Non-Traded REITs

Starting in 2015, several customers filed complaints alleging that Pellegrino caused them to sustain financial losses by facilitating the sale of speculative, non-traded real estate investment trusts (non-traded REITs). According to BrokerCheck, the broker was employed by TCM Securities at the time of the alleged activities.

Alleged damages in these disputes have ranged widely, with the highest alleged damages totalling $150,000.

If Pellegrino Caused You to Sustain Financial Loss, We Want to Help

Six customer disputes involving Pellegrino remain pending. Our firm believes that other customers may also have suffered losses at this broker’s hands, and we want to help them recover their damages.

If Michael August Pellegrino was your broker, and you have reason to believe that he acted in a way that caused you suffer financial loss, the Securities and Business Litigation team at Levin, Papantonio, Rafferty, Proctor, Buchanan, O’Brien, Barr & Mougey, P.A. review your case, help you understand your options, and fight on your behalf to recover damages. We charge you attorney’s fees only if we recover for you.

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