According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Paul Mcgonigle (Mcgonigle), previously associated with LPL Financial LLC, has at least one disclosable event. These events include one regulatory event, alleging that Mcgonigle recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on June 06, 2024.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Paul R. McGonigle (‘McGonigle’ or ‘Respondent’). In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the ‘Offer’) which the Commission has determined to accept. The Commission finds that on or about February 3, 2023, McGonigle entered a guilty plea before the United States District Court for the District of Massachusetts in United States v. McGonigle, Crim. No. 1:21-cr-10181. McGonigle pled guilty to three counts of wire fraud in violation of 18 U.S.C. \\u00a7 1343, one count of mail fraud in violation of 18 U.S.C. \\u00a7 1341, one count of aggravated identity theft in violation of 18 U.S.C. \\u00a7 1028A(a)(1), one count of investment adviser fraud in violation of 15 U.S.C. \\u00a7\\u00a7 80b-6 & 80b-17, and two counts of money laundering in violation of 18 U.S.C. \\u00a7 1957. As part of his guilty plea, McGonigle agreed to a sentencing enhancement because he admitted his offenses ‘involved the violation of securities laws and, at the time of the offense, [McGonigle] was a registered broker or person associated with a broker or dealer and an investment advisor or person associated with an investment advisor.’ Additionally, the counts of the indictment to which McGonigle pled guilty alleged, among other things, that between 2015 and 2021, McGonigle stole at least $1.4 million from the accounts of at least fifteen clients, including those who were elderly or in poor physical and mental health. To carry out his scheme, McGonigle caused unauthorized withdrawals from his clients’ annuities by posing as clients on calls with their annuity companies or by signing their names on forms requesting withdrawals. He also induced clients to sign documents requesting the surrender of their annuities and the transfer of those funds to McGonigle, by falsely representing that he would invest those funds on their behalf. Instead, McGonigle used the funds for personal and business expenses.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions. Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Finally, the advisor must use their knowledge of the first two elements to consider reasonably available investment option alternatives and come to the conclusion that there is a reasonable basis to believe that the recommendation or advice being provided is in the retail investor’s best interest.
Brokerage firms and advisors must also understand the features and limitations of various account types as part of meeting Reg BI’s care obligations. Firms typically offer a variety of account options and services with different trading costs, services, such as account and activity monitoring. An advisor’s recommendation as to what type of securities account to open can alter the customers’ overall costs and investment returns. The advisor must determine that the client can benefit from the type of account being recommended to be opened and in the investor’s best interest taking into account the costs, benefits, and needs of the client.
Mcgonigle has been in the securities industry for more than 34 years. Mcgonigle has been registered as a Broker with LPL Financial LLC since 2018.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.