FINRA files complaint against Michael A. Darvish of Spartan Capital Securities alleging excessive trading and Reg BI violations

FINRA has filed a disciplinary complaint against Michael A. Darvish, formerly a broker at Spartan Capital Securities, LLC in Great Neck, New York, alleging excessive trading recommendations and willful violations of Regulation BI.

Important notice: FINRA issued the following complaint. Issuance of a disciplinary complaint represents FINRA’s initiation of a formal proceeding, not a decision as to any of the allegations contained in the complaint.

The complaint (FINRA Case #2018056490335, filed December 15, 2025) names Darvish as a respondent alongside Spartan Capital Securities, LLC, Frederick Joseph Cammarano III, Kim Marie Monchik, James Robert Pecoraro, and John Joseph Stapleton.

The Allegations Against Darvish

According to the FINRA complaint, Darvish recommended securities transactions that were excessive and quantitatively unsuitable in light of his customers’ investment profiles. The complaint alleges that these excessive trading recommendations were evidenced by high cost-to-equity ratios, elevated turnover rates, frequent transactions, and substantial transaction costs incurred by the customers.

The complaint alleges that Darvish willfully violated Exchange Act Rule 15l-1(a)(1) (Regulation BI) by failing to act in the best interest of his customers at the time the recommendations were made. Specifically, the complaint asserts that the series of securities transactions recommended were excessive, not in customers’ best interests, and placed the financial interests of Spartan Capital Securities and its representatives ahead of the customers’ interests.

Additionally, the complaint alleges that Darvish failed to exercise reasonable diligence, care, and skill to have a reasonable basis to believe that the series of securities transactions recommended to customers were not excessive and were in the customers’ best interests in light of their investment profiles, potential risks, rewards, and associated costs.

Broader Context of the Complaint

The complaint against Darvish is part of a larger enforcement action alleging that Spartan Capital Securities and its representatives engaged in widespread churning over a four-year period. According to the complaint, this misconduct defrauded customers, generated millions in revenue for the firm and its representatives, and caused customers millions in harm.

Other respondents named in the same complaint include the firm itself (Spartan Capital Securities, LLC); Frederick Joseph Cammarano III; Kim Marie Monchik; James Robert Pecoraro; and John Joseph Stapleton. The complaint alleges that certain respondents willfully violated Section 10(b) of the Securities Exchange Act and Exchange Act Rule 10b-5 through coordinated and intentional churning, while others failed in supervisory obligations.

Current Status

It is important to note that, as of the time of this report, the complaint is still pending. No findings of wrongdoing have been made. The complaint is related to activities during Darvish’s time at Spartan Capital Securities, not his subsequent employment at other firms.

Darvish’s Response

According to FINRA BrokerCheck, Darvish has submitted a firm statement in response to the allegations. He denies the allegations against him under the Second and Third Causes of Action in the Complaint. Darvish states that at all times he acted with his clients’ best interest as the primary factor in all of his recommendations. He indicates his intention to vigorously defend the charges against him and believes he has meritorious defenses to the charges.

Regulatory Background

Regulation BI (Reg BI), formally known as the Securities and Exchange Commission’s Regulation Best Interest, requires broker-dealers and their representatives to act in the best interest of their customers when making investment recommendations. This standard requires brokers to have a reasonable basis to believe that recommendations are suitable for the customer, considering factors including the customer’s investment profile, financial needs and goals, and risk tolerance.

Excessive trading, or churning, is a violation that occurs when a broker engages in securities transactions for a customer account that are excessive in frequency, size, or character given the customer’s investment objectives and financial situation. Churning is designed to generate commissions for the broker or firm rather than to benefit the customer.

Steps to take right now

1. Gather your account statements, trade confirmations, and any correspondence with your broker or firm, including emails, texts, and written materials about the investments.
2. Look up your broker on FINRA BrokerCheck at brokercheck.finra.org to review their full disclosure record.
3. Contact a securities arbitration attorney for a consultation to evaluate your options.

Rosenberger + Kawabata represents retail investors in FINRA arbitration proceedings involving excessive and unsuitable trading, including cases against brokers at Spartan Capital Securities and other firms. If you traded with Mack Leon Miller and experienced losses due to excessive or unsuitable recommendations, contact Rosenberger + Kawabata online for a free and confidential consultation, or call (310) 894-6921.

The information in this post comes from FINRA’s public BrokerCheck database. You can view the full detailed report (CRD# 3243141) here.

You can view the full December 2025 FINRA disciplinary actions report here.