Joseph Gunnar & Co. LLC accepted a censure and $100,000 fine in a FINRA settlement approved on 21 October 2026. The seven-page letter of acceptance, waiver and consent, case 2024080120501, finds that the firm failed to maintain and enforce reasonable supervision of excessive trading from at least February 2023 through August 2024. Gunnar accepted the findings without admitting or denying them.[1]
The regulator’s review covered at least February 2023 to August 2024. FINRA says Gunnar produced active-account reports showing turnover and cost-to-equity ratios, but its procedures offered supervisors no meaningful benchmarks for abnormal figures or clear triggers for commission restrictions. In three accounts the monthly reports recorded risk indicators; for much of the period the firm responded only by mailing customers trading-activity letters. Commission charges were restricted in the three accounts in August 2024.[1]
The cost of repeated trading
Financial indicators documented in the AWC
| Measure | Account A | Account B | Account C |
|---|---|---|---|
| Annualised turnover | 16.15× | 12.00× | 6.82×Source 1 |
| Annualised cost to equity | 45.07% | 37.34% | 20.22%Source 1 |
| Trading costs | $16,734 | $11,562 | $12,086Source 1 |
| Realised trading losses | $16,971 | $11,769 | $1,057Source 1 |
| Supervisory concern | Activity reports showed red flags | Activity reports showed red flags | Activity reports showed red flagsSource 1 |
| Restitution status | Paid in 2026 | Paid in 2026 | Paid in 2026Source 1 |
The cost-to-equity ratio measures the return needed to cover trading expenses; it is not the account’s investment return. Customer A’s annualised 45.07% ratio meant the account needed to grow by more than 45% a year just to break even. FINRA says no single measure establishes excessive trading, while turnover of six or more or a cost-to-equity ratio above 20% generally indicates it. All three accounts exceeded both benchmarks.[1]
The three accounts appeared in monthly active-account reports. Yet Gunnar initially responded only with trading-activity letters, and did not restrict commissions until August 2024. FINRA distinguishes that delay from the written-procedure deficiency, which ran through April 2024: the earlier procedures lacked benchmarks for identifying excessive trading and clear steps for commission restrictions or follow-up after letters. The firm revised its procedures in April.[1]
FINRA records that the firm paid restitution to each customer in 2026. It does not give the restitution amounts in this agreement; the $100,000 is a separate regulatory fine. The agreement also records a December 2017 censure and $60,000 fine for earlier supervisory deficiencies. The 2026 findings concern supervision designed to achieve compliance with Regulation Best Interest’s Care Obligation, alongside FINRA Rules 3110 and 2010.[1]
The case turns on what happened after an alert. Producing a report and notifying the customer did not resolve FINRA’s concern about whether supervisors investigated and acted on repeated red flags. A supervisory record therefore needs to connect the alert to the review, decision and follow-up, rather than stop at evidence that a report was generated.[1]
Sources & further reading
- FINRA AWC No. 2024080120501 — Joseph Gunnar & Co. LLC, 7-page accepted disciplinary agreement FINRA · 21 Oct 2026 · Accessed 29 Oct 2026
- FINRA published disciplinary record — case 2024080120501 FINRA · 21 Oct 2026 · Accessed 29 Oct 2026