According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Michael McTigue (McTigue), in August 2017, was terminated by his employer ProEquities after the firm alleged that during a recent branch inspection of the firm discovered issues relating to (1) use of unapproved email address; (2) use of unapproved performance report; (3) customer signature discrepancies on firm paperwork; (4) frequent trading of mutual fund A shares; (5) breakpoint sales of mutual funds; (6) unapproved marketing materials; (7) undisclosed outside business activities (OBA); and (8) text messaging a customer. When the firm presented these issues to McTigue and requested an explanation he resigned prior to submitting explanation to all of the issues.
At this time it is unclear the extent and scope of McTigue’s securities violations and outside business activities. McTigue’s CRD lists that he operates a d/b/a called South Coast Financial as an outside business activity. In addition, McTigue lists Realty South as a real estate business. While at this time it is unknown if McTigue used these businesses and unapproved communications methods to sell investments, the providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.
In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
McTigue entered the securities industry in 1998. From August 2010 until June 2014 McTigue was associated with Lincoln Investment. From May 2014 until October 2016 McTigue was associat3d with InvestaCorp, Inc. (InvestaCorp). Then from September 2016 until August 2017 McTigue was registered with ProEquities. From August 2017 through September 2017 McTigue went back to InvestaCorp. Finally for only one week McTigue was associated with Newbridge Securities Corporation out of the firm’s Boca Raton, Florida office location.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.