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FINRA Bars Wells Fargo Advisors Broker for Unsuitable and Excessive Trading

Matthew Maczko, a former registered representative with Wells Fargo Advisors, LLC, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was barred from association with any FINRA member in all capacities amid allegations that he made unsuitable recommendations and excessively traded four brokerage accounts held by an elderly customer.

According to FINRA, Matthew Christopher Maczko, of Downers Grove, Illinois, was the registered representative for his now 93 year old customer’s four brokerage accounts.  According to FINRA, Mr. Maczko allegedly controlled the four brokerage accounts.  During the relevant period, January 2009 to April 2016, FINRA found that Mr. Maczko effected over 2800 transactions in this customer’s accounts.  FINRA stated that Mr. Maczko’s excessive trading strategy generated approximately $581,650 in commissions, $84,270 in fees, and allegedly caused his customer $397,000 in trading losses.  Without admitting or denying the findings, Mr. Maczko was barred from association with any FINRA member in any capacity.

Excessive trading or “churning” involves excessive trading by a broker in a client’s account mainly to generate commissions.  Churning is a violation of Federal and state securities statutes, industry rules and regulations and a breach of fiduciary duty to investors.  Churning can occur if a stockbroker exercises control over the investment decisions in your account and purchases stocks or recommends that you purchase and sell stocks for his/her benefit, i.e., commissions!  These trades rarely, if ever, make the investor any money.  In fact, the additional commissions raise the break-even point for the investor to the level where the stock must perform at an extremely high level in order for the investor to make any money.  Although there is no quantitative measure for churning, frequent buying and selling of securities that does little to meet a client’s investment objectives may be construed as evidence of churning.  As seen in the aforementioned stockbroker misconduct, churning may result in substantial losses in a client’s account.

Stockbrokers have been known to engage in many types of practices that may be in violation of industry and firm rules, practices, and procedures.  In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a reasonable supervisory system.  The implementation of the rules require supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, and 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 liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered losses stemming from excessive trading (churning), unsuitable recommendations and/or other stockbroker misconduct by their broker can bring forth claims to recover damages against broker-dealers, like Wells Fargo Advisors, which should consistently oversee its brokers’ activities in order to prevent the above-described prohibited conduct.

Have you suffered losses in your Wells Fargo Advisors account due to your stockbroker’s unsuitable and/or excessive trading?  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 Wells Fargo Advisors stockbrokers who may have engaged in unsuitable excessive trading strategies 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 pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.