Finra sues smoothie-throwing broker for ducking cash reporting rules

Finra sues smoothie-throwing broker for ducking cash reporting rules
James Iannazzo made cash transactions totaling close to $846,000 to avoid detection, the regulator alleges.
JUN 28, 2023

Former Merrill Lynch broker James Iannazzo, who was fired in 2022 after his tirade at a smoothie shop in Connecticut went viral, now faces allegations that for more than six years, while employed at Merrill, he made a series of cash deposits and withdrawals to evade triggering federal rules linked to anti-money laundering requirements, according to a complaint filed Friday by Finra's enforcement department.

A bank must electronically file what is known as a Currency Transaction Report for each transaction of more than $10,000. According to the Financial Industry Regulatory Authority Inc. lawsuit, from December 2014 to March 2021, Iannazzo restructured 368 cash deposits and withdrawals over $10,000 into smaller transactions over several days at the same bank. He also allegedly withdrew more than $10,000 in cash in one day using two different financial institutions, and repeatedly used his Merrill Lynch account.

The transactions allegedly totaled close to $846,000, according to the complaint. Finra alleges that Iannazzo's conduct in the matter violates industry rules and standards of "conduct in the business," known as Rule 2010.

Iannazzo could not be reached at his office in Westport, Connecticut, where he has been registered with Aegis Capital Corp. since March 2022.

Finra opened its investigation into Iannazzo's cash transactions last fall. According to the complaint, the cash was used to pay for a pool and other home improvements; by paying in cash, vendors also ducked a 6.35% local tax.

Iannazzo first gained notoriety in the financial advice industry when Merrill Lynch fired him in January 2022 after he was involved in a disorderly incident at a Connecticut smoothie shop.

He had been working at Merrill Lynch in Stamford since 1996 and regularly made Barron’s ranking of top advisers for Connecticut.

Iannazzo was arrested by local police after erupting at a Robeks smoothie store, throwing a drink at an employee, hitting them and demanding to know who made a smoothie that contained peanuts and caused his child’s severe allergic reaction, according to the Fairfield police.

Iannazzo also made comments to an employee referencing their immigration status, according to the police. A video of the incident, in which Iannazzo repeatedly uses profanity and calls one employee an “immigrant loser,” caused a firestorm at the time on social media platforms.

Months later, he agreed to do a rehabilitation program, sidestepping a criminal conviction, and settled with one of the Robeks' employees for $7,500.

Will AI remain one of the market's 'megatrends'?

Latest News

LPL building out alts, banking services to chase wirehouse advisors, new CEO says
LPL building out alts, banking services to chase wirehouse advisors, new CEO says

New chief executive Rich Steinmeier replaced Dan Arnold on October 1.

Franklin Templeton CEO vows to "do what's right" amid record outflows
Franklin Templeton CEO vows to "do what's right" amid record outflows

The global firm is navigating a crisis of confidence as an SEC and DOJ probe into its Western Asset Management business sparked a historic $37B exodus.

For asset managers, easy experience is key to winning advisors' businesses
For asset managers, easy experience is key to winning advisors' businesses

Beyond returns, asset managers have to elevate their relationship with digital applications and a multichannel strategy, says JD Power.

Why retaining HNW clients ultimately comes down to one basic thing
Why retaining HNW clients ultimately comes down to one basic thing

New survey finds varied levels of loyalty to advisors by generation.

Stocks drop as investors digest Microsoft, Meta earnings
Stocks drop as investors digest Microsoft, Meta earnings

Busy day for results, key data give markets concerns.

SPONSORED Out with the old and in with the new: a 50% private markets portfolio

A great man died recently, but this did not make headlines. In fact, it barely even made the news. Maybe it’s because many have already mourned the departure of his greatest legacy: the 60/40 portfolio.

SPONSORED Destiny Wealth Partners: RIA Team of the Year shares keys to success

Discover the award-winning strategies behind Destiny Wealth Partners' client-centric approach.