The Financial Industry Regulatory Authority expelled Reid & Rudiger LLC and barred cofounders Clifford Reid and Chief Executive Officer Edward Rudiger Jr. from associating with any member firm after finding they churned and excessively traded customer accounts in violation of Regulation Best Interest and FINRA rules. In a related action, FINRA suspended supervisors Marc Harrison and Kelli Mezzatesta for three months in all principal capacities, fined them USD 5,000 each and required 20 hours of supervision-related continuing education for failing to identify and investigate red flags tied to the misconduct. FINRA found that the firm and its cofounders excessively traded 20 customer accounts over nearly six years, and that several of those accounts were also churned with intent to defraud or reckless disregard for customers' interests. Customers incurred about USD 2 million in commissions and trading costs and about USD 2.7 million in losses. Reid and Rudiger recommended a high-volume, high-cost market-timing strategy that made it virtually impossible for customers to earn a profit, with some accounts showing annualized cost-to-equity ratios above 111%, 69% and 67%. The case also included supervisory failures: the firm and Rudiger did not maintain a system reasonably designed to detect and respond to churning and excessive trading, while the firm, Harrison and Mezzatesta did not use cost-to-equity analysis or available exception reports despite numerous warning signs. The parties settled by accepting FINRA's findings without admitting or denying them.
Financial Industry Regulatory Authority2026-06-17
Financial Industry Regulatory Authority expels Reid & Rudiger and bars two cofounders over Reg BI churning and excessive trading case
FINRA expelled Reid & Rudiger LLC and permanently barred cofounders Clifford Reid and Edward Rudiger Jr. for churning and excessively trading 20 customer accounts in violation of Regulation Best Interest and other securities rules. The misconduct generated about USD 2 million in commissions and costs and about USD 2.7 million in customer losses over nearly six years. FINRA also suspended two supervisors for three months, fined them USD 5,000 each and imposed continuing education requirements for supervisory failures.