SEC Sanctioned Truist Advisory Over Trading Misconduct

The firm agreed to a $200,000 penalty following a representative's illicit trade practices.

Updated on Sept. 23, 2026 in Financial Crime

Bold flat-color editorial illustration showing a minimalist brass balance scale with one weight, representing regulatory financial oversight. — The SEC sanctioned Truist Advisory Services for $200,000 following a representative's illicit practice of shifting personal trading losses into client accounts. AI Illustration. Upload story photo >

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The SEC has sanctioned Truist Advisory Services Inc. for its failure to supervise a representative who shifted personal trading losses to client accounts. The firm agreed to a $200,000 penalty to settle the charges.

Why it matters

The case highlights the importance of internal oversight, as the firm failed to monitor for patterns of trade errors that allowed a representative to engage in unauthorized cancel-rebilling. By failing to follow its own trading policies, the company enabled the misconduct to persist until it was flagged by an outside custodian.

Truist Advisory Services Inc. was censured and agreed to pay a $200,000 penalty, though it did not admit to the SEC findings. Separately, the representative, Gary Costello, was ordered to pay $1.5 million in disgorgement and $195,000 in penalties while being banned from the industry.

The players

Truist Advisory Services Inc.

This is a financial advisory firm that provides investment management and planning services to clients across the United States.

Gary Costello

He is a former representative at Truist Advisory Services Inc. who was banned from the financial industry following the discovery of unauthorized trading practices.

Securities and Exchange Commission

This is a federal regulatory agency responsible for protecting investors and maintaining fair, orderly, and efficient markets.

FINRA

This is a government-authorized not-for-profit organization that oversees U.S. broker-dealers to ensure market integrity.

The details

Gary Costello utilized cancel-rebilling to shift personal losses to client accounts, a scheme that went unchecked because the firm approved trade corrections without auditing individual representative behavior. Following the discovery of this activity, the firm terminated Costello and reimbursed all impacted clients.

The SEC concluded an enforcement case against Gary Costello in 2025.
The SEC officially sanctioned Truist Advisory Services Inc. in September 2026.

Legal Context

This enforcement action follows the regulatory precedent set by the 2025 SEC enforcement case against Gary Costello. It underscores a broader trend of federal regulators pursuing both individuals and their host firms for failures in supervision and internal control policies.

Clients of financial advisory firms should be aware that firms are mandated to maintain internal monitoring to prevent trade correction abuse. If you are an investor, you may check the background of your financial representative through public regulatory databases to verify their professional standing.

The takeaway

Firms are legally obligated to maintain rigorous oversight of all trade correction requests to prevent internal fraud. Investors should regularly monitor their own account statements for unusual activity or unauthorized trade corrections to catch discrepancies early.