Publicly available records provided by the Financial Industry Regulatory Authority (FINRA) indicate that broker-dealer Moloney Securities, Co., Inc. (Moloney Securities) (CRD # 38535) was recently sanctioned by FINRA’s Department of Enforcement. The sanction occurred as a result of an investigation into its failure to establish and maintain a supervisory system to comply with suitability rules. The Law Office of Kevin J. Deloatch, Esq. is interested in speaking to investors who have complaints regarding Moloney Securities.
Registration Background for Moloney Securities
Moloney Securities became a FINRA member in 1995. It is headquartered in Manchester, MO. It currently has approximately 50 branch offices and 150 registered representatives.
FINRA’s Allegations against Moloney Securities
FINRA’s investigation led to Moloney Securities entering into a Letter of Acceptance, Waiver and Consent (AWC) with FINRA on May 4, 2020. According to the AWC, Moloney Securities consented to, without either admitting to or denying, the following findings by FINRA’s Department of Enforcement:
- “Moloney [Securities] failed to establish and maintain a supervisory system, including written supervisory procedures reasonably designed to achieve compliance with FINRA’s suitability rule with respect to qualitative suitability and concentration in high-risk products”;
- “[Moloney Securities] did not provide any training to its Regional Managers on reviewing the suitability of recommendations in such products, nor did the firm issue any instructional materials or alerts, such as compliance bulletins, addressing these issues”;
- “The electronic surveillance system provided to and utilized by Moloney [Securities] during the Relevant Period, however, was not equipped to reasonably surveil for concentration in high-risk products or qualitative suitability”;
- “While Moloney [Securities] generally instructed Regional Managers to review transactions for potential suitability concerns, the Firm did not provide reasonable guidance, written procedures or training programs to address how to conduct those reviews”;
- “[Moloney Securities] also failed to provide Regional Managers with reasonable automated tools that would have helped them perform those reviews”
- “[Moloney Securities’] supervisory system and written procedures during the Relevant Period were not reasonably designed to achieve compliance with FINRA Rule 2111 with respect to qualitative suitability and concentration in high-risk products” and
- “By virtue of foregoing, Maloney [Securities] violated NASD Rule 3010, FINRA Rule 3110 and FINRA Rule 2010.”
FINRA Sanctions Moloney Securities
As a result of such violations and in addition to the above described findings and conclusions, FINRA’s May 4, 2020 AWC also indicates that Moloney Securities consented to the following sanction:
- A censure;
- A fine of $100,000; and
- Restitution in the amount of $15,574.13, plus interest.
Moloney Securities has a History of Complaints
In addition to the findings of FINRA’s Department of Enforcement, FINRA BrokerCheck for Moloney Securities reveals it has a history of customer complaints including but not necessarily limited to the following:
- On March 20, 2002 a customer initiated an arbitration against the firm alleging churning, suitability and failure to supervise. The customer alleged damages in the amount of $40,000.00. The arbitration was settled on May 23, 2003, in the amount of $10,675.00.
- On September 12, 2008 a customer initiated an arbitration against Moloney Securities alleging misrepresentation, suitability and failure to supervise. The customer alleged damages in the amount of $33,800.90. The arbitration resulted in an award against the firm in the amount of $9,970.00 on May 15, 2009.
- On May 25, 2011 a customer initiated an arbitration against Moloney Securities alleging misrepresentation, breach of contract, suitability, failure to supervise and negligence. The customer alleged damages in the amount of $2,381,722.00. The arbitration resulted in an award against the firm in the amount of $50,000.00 on December 18, 2012.
- On August 15, 2013 a customer initiated an arbitration against Moloney Securities alleging breach of fiduciary duty, manipulation, misrepresentation, omission of facts, suitability, unauthorized trading, breach of contract, failure to supervise and negligence. The customer alleged damages in the amount of $500,000.00. The arbitration resulted in an award against the firm in the amount of $273,119.00 on November 13, 2014.
- On June 27, 2017 a customer initiated an arbitration against Moloney Securities alleging breach of fiduciary duty, fraud, misrepresentation, omission of facts, suitability, breach of contract, failure to supervise and negligence. The customer alleged damages in the amount of $660,000.02. The arbitration resulted in an award against the firm in the amount of $300,000.00 on October 10, 2018.
If you or someone you know has or had a brokerage account with Moloney Securities and have concerns regarding losses in your investments or possible sales practice violations including fraud, you may be entitled to recover lost funds. The Law Office of Kevin J. Deloatch, Esq. has an extensive securities law practice and over 30 years of experience on Wall Street. Call today at (646) 792-2156 for a free consultation. The time to file your claim may be limited so you should call today to avoid delay.
