FINRA has expelled Reid & Rudiger LLC and barred its co-founders from the securities industry after a nearly six-year churning scheme cost customers approximately $2.7 million. The regulator accepted an Offer of Settlement on June 17, 2026, that also suspended two supervisors and ordered them to complete additional compliance training. The case offers a clear example of how a high-volume, high-cost strategy can wipe out customer accounts even when the underlying trades involve well-known large-cap stocks.
What FINRA alleged
From February 2018 through October 2023, the New York–based broker-dealer and its principals executed what FINRA described as a high-volume, high-cost market-timing strategy. Co-founders Edward J. Rudiger Jr., CRD 2118724, and Clifford R. Reid, CRD 1905920, recommended that customers sell positions after short holding periods—sometimes one to three months, occasionally only one or two days—to buy different stocks based on new research.
The firm charged commissions of roughly 2% to 4% on both sides of each trade, plus a $99 service charge per transaction. Because the strategy depended on constant round-trip activity, commissions consumed most of any potential gain. FINRA said the representatives also misrepresented the strategy to at least some customers by calling it suitable for conservative, long-term investors.
The numbers behind the strategy
| Metric | Rudiger accounts | Reid accounts |
| Relevant period | Feb 2018 – Oct 2023 | Feb 2022 – Oct 2023 |
| Customer accounts | 15 | 5 |
| Accounts churned | 5 | 3 |
| Annualized turnover range | 6.92 to 17.33 | 8.46 to 16.76 |
| Cost-to-equity ratio range | 34.85% to 111.59% | 46.52% to 73.95% |
| Customer trading losses | ~$2 million | ~$700,000 |
| Customer costs / firm revenue | Over $2 million; firm earned ~$1.87 million in commissions | Over $149,000 in markups and markdowns |
Who was named in the settlement
The settlement names four individuals and the firm itself. Reid & Rudiger LLC, a FINRA-member broker-dealer headquartered in New York, had two branches and nine registered representatives at its peak. Evermore Holdings, LLC owned the firm, and Marc Harrison held roughly 98% ownership of that holding company.
- Edward J. Rudiger Jr., CRD 2118724 — chief executive officer and general securities principal; barred from association with any FINRA member.
- Clifford R. Reid, CRD 1905920 — registered representative and investment banking representative; barred from association with any FINRA member.
- Marc Harrison, CRD 1605568 — majority owner, registered principal, and designated supervisory principal; suspended three months in all principal capacities, fined $5,000, and ordered to complete 20 hours of supervisory continuing education.
- Kelli A. Mezzatesta, CRD 4701170 — chief compliance officer; suspended three months in all principal capacities, fined $5,000, and ordered to complete 20 hours of supervisory continuing education.
FINRA cancelled the firm’s registration on June 1, 2026, for failure to pay fees. Reid & Rudiger had filed its Form BDW requesting withdrawal on April 30, 2026, and filed Form U5 termination notices for each respondent the same day.
Supervisory breakdown at the firm
FINRA also found that Reid & Rudiger failed to establish and maintain a supervisory system reasonably designed to detect churning and excessive trading. The firm’s written supervisory procedures required review of exception reports, but the procedures did not require anyone to calculate turnover or cost-to-equity ratios.
Mezzatesta and Harrison were responsible for supervising Rudiger and Reid under those procedures. FINRA said they never reviewed the firm’s exception reports for trading activity and never calculated the turnover or cost-to-equity metrics that would have flagged the misconduct. The firm therefore violated FINRA Rules 3110 and 2010, and from June 30, 2020, onward it also violated Regulation Best Interest’s compliance obligation.
What this means for investors
The Reid & Rudiger settlement is a reminder that a broker-dealer’s size or location does not determine whether its recommendations are suitable. Customers lost money on a strategy that traded familiar large-company equities but did so at a pace that made profitability nearly impossible after commissions and fees.
Investors who notice frequent trading activity, repeated full-position sales, or account statements showing heavy commission charges should ask direct questions. A legitimate strategy should have a clear thesis, a defined time horizon, and costs that are proportionate to the expected return. When those elements are missing, the account may be churned.
How to spot churning in a brokerage account
- High turnover: positions are sold and replaced many times per year.
- High cost-to-equity: commissions and fees consume a large share of account value.
- Short holding periods: stocks are sold within weeks or days of purchase.
- Unsolicited recommendations: trades occur without a clear request from the customer.
- Concentration in a single strategy: the advisor pitches one high-activity approach to multiple customers.
Investors who believe they suffered losses related to this matter may wish to consult a qualified securities attorney to review their options.
