Matthew P. Schulman, a former broker employed with the Woodcliff Lake, New Jersey branch of Vandham Securities Corporation (Vandham), has been barred by the Financial Industry Regulatory Authority (FINRA) based on findings that he engaged in a fraudulent bond trading scheme in which he effected bond trades between his personal brokerage account and his firm’s proprietary trading account at prices that significantly favored him, resulting in illicit profits of approximately $30,000.
Matthew Schulman, of Edgewater, New Jersey, was a bond trader for Vandham and had a duty to act for the firm’s benefit. However, FINRA found that Mr. Schulman effected approximately 23 bond transactions between his personal brokerage account and the firm’s proprietary account in which he caused the firm to sell bonds to his personal account and then, promptly thereafter, had the firm repurchase the same bonds at a higher price. For example, FINRA found that in some instances Mr. Schulman paid approximately 50% less to purchase a bond from the firm’s proprietary account, and in some instances Mr. Schulman charged the firm 500% or more to buy a bond from his personal account.
FINRA’s findings stated that as a result of Mr. Schulman’s fraudulent trading scheme, he willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Mr. Schulman neither admitted to nor denied the findings but consented to the sanctions.
Stockbrokers, registered representatives, and other financial industry professionals have been known to engage in many types of fraudulent and unlawful behavior which violate industry rules and procedures. In order to protect investors from such misconduct, FINRA rules require broker-dealers to establish and implement a reasonable supervisory system. The implementation of the rules requires supervisors to monitor employees to ensure they comply 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 do not establish and implement these protective measures, they may be a liable to account holders for losses flowing from the misconduct. As a result, account holders who have suffered losses stemming from broker misconduct can bring forth claims to recover damages against broker-dealers like Vandham Securities Corporation, which have a duty to supervise its employees in order to prevent the above-described misconduct.
Have you suffered losses in your Vandham Securities account due to broker misconduct? 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 stockbrokers for unsuitable recommendations, misrepresentations, and/or other fraudulent and illegal conduct.
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 40 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 post a comment, call (800) 732-2889, send Mr. Pearce an email at firstname.lastname@example.org, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.