Matthew Maberry, a Registered Principal with the Alton, Illinois branch of Alton Securities Group, Inc. (Alton Securities) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was fined and suspended by the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the exchange-traded fund (ETF) and mutual fund recommendations and sales by registered representatives under his supervision.
Matthew Dale Maberry, of Bethalto, Illinois, was the Chief Executive Officer and Chief Compliance Officer with Alton Securities and was responsible for the design and implementation of the firm’s supervisory system. FINRA found that Mr. Maberry failed to ensure that this supervisory system was implemented to supervise the sales activity of its registered representatives. Specifically, FINRA stated that the supervisory system was not reasonably designed to ensure that employees made suitable recommendations of complex investment products such as non-traditional ETFs and non-traditional mutual funds.
FINRA also found that Mr. Maberry recommended and sold non-traditional ETFs and mutual funds to customers without fully understanding the risks associated with these securities and, therefore, not having a reasonable basis for recommending them. According to FINRA, Mr. Maberry recommended and executed 50 unsuitable purchases of non-traditional mutual funds for 14 customer accounts which resulted in losses of $38,445 for the 14 customers.
Without admitting or denying FINRA’s findings, Matthew Maberry was fined $10,000, suspended from association with any FINRA member in any capacity for five months, and ordered to pay $38,445, plus interest, in restitution to customers. The suspension is in effect from March 21, 2016 through August 20, 2016.
FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing. The implementation of the rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for investment losses which stem from their employees’ misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s failure to supervise the unsuitable recommendations of its representatives can bring forth claims to recover damages against firms, like Alton Securities Group, which have a duty to supervise employees in order to protect their customers’ interests.
Have you suffered losses in your Alton Securities Group account due unsuitable recommendations or trades in your investment account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Alton Securities Group stockbrokers who may have engaged in misconduct and caused investors losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.