Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Ronald Molo (Molo), previously associated with Edward Jones, has at least 6 disclosable events. These events include 3 customer complaints, 3 regulatory events, alleging that Molo recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on November 08, 2023.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against Ronald T. Molo. 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 September 27, 2022, in the civil action Case No. 21-cv-6286, in the United States District Court for the Northern District of Illinois, a judgment by default was entered against Molo permanently enjoining him from participating, directly or indirectly, in the issuance, purchase, offer, or sale of any security, including inducing or attempting to induce the purchase or sale of any security, or causing any person or entity to engage in any activity for the purpose of inducing or attempting to induce the purchase of sale of any security, or deriving compensation from any activity engaged in for the purpose of inducing or attempting to induce the purchase or sale of any security, and further including but not limited to, participating in the issuance, purchase, offer, or sale of any security through an entity that Molo owns or controls; provided, however, that such injunction shall not prevent Molo from purchasing or selling securities listed on a national securities exchange for his own personal account. The Commission’s complaint alleged that between January 2019 and November 2020, Molo misappropriated a total of approximately $800,000 from two of his investment advisory clients and one of his brokerage customers. On December 1, 2022, Molo pled guilty to one count of wire fraud in violation of Title 18 United States Code, Sections 1343 before the United States District Court for the Northern District of Illinois Eastern Division, in Criminal Case No. 1:21-CR-698. On May 23, 2023, a judgment in the criminal case was entered against Molo. He was sentenced to a prison term of 24 months, followed by two years of supervised release, and he was ordered to pay restitution in the amount of $710,308. The count of the criminal indictment to which Molo pled guilty alleged, inter alia, that from approximately 2018 through June 2021, Molo, while employed by a large financial institution as a licensed financial advisor, conducted a scheme to defraud and obtain money from clients through materially false and fraudulent pretenses, representations, and promises. As part of the scheme, Molo falsely advised multiple clients that he had a good investment opportunity for them, supposedly involving tax-exempt, interest-bearing bonds or bond funds. In reality, this investment opportunity did not exist. As part of the scheme, Molo fraudulently induced clients to transfer funds to his personal bank account, and Molo then converted client funds for his own personal use.
FINRA BrokerCheck shows a final customer complaint on October 21, 2021.
Allegations relate to misappropriation of ~$800,000.00 of client funds and fictitious investments. See Illinois Securities Department Notice of Hearing dated October 26, 2021 in matter number 2100455
FINRA BrokerCheck shows a final customer complaint on September 30, 2021.
Respondent Molo failed to respond to FINRA requests for information.
FINRA BrokerCheck shows a settled customer complaint on June 22, 2021.
Client alleges former FA stole funds from them by wiring client funds to a bank account controlled by former FA’s spouse under the guise that they were making an investment.
FINRA BrokerCheck shows a settled customer complaint on June 18, 2021.
Client alleges former FA stole funds from them by wiring client funds to a bank account controlled by former FA’s spouse under the guise that they were making an investment.
FINRA BrokerCheck shows a settled customer complaint on June 16, 2021.
Client alleges former FA stole funds from them by wiring client funds to a bank account controlled by former FA’s spouse under the guise that they were making an investment.
In the financial industry advisors must meet the requirements of the SEC’s Regulation Best Interest (Reg BI) in providing investment advice and services. Reg BI established a ‘best interest’ standard for brokerage firms and registered representatives. This standard applies when a registered representative is providing investment advice through making recommendations customers and covers securities transaction, investment strategies, and recommendations concerning advice on opening of an account or accounts. This Reg BI standard of care applies to registered representatives making recommendations to customers in the purchase, sale, or exchange of securities or the implementation of investment strategies involving securities and non-securities. The rule also applies to the handling of opening accounts such as account transfers and types of accounts being recommended to be opened.
Another aspect of the care obligation is focusing on the client’s specific needs which brokers must reasonably understand through obtaining information for the client’s investment profile. In completing a customer’s investment profile the advisor should include information such as the investor’s investment time horizon; liquidity needs; risk tolerance; experience with various investment vehicles; investment objectives and financial goals; assets and debts including outside investment accounts; marital status; tax information; age; and other relevant information that may be individual to the investor that the advisor would need to know to properly render advice or provide services. The SEC has stated that Reg BI is drawn from fiduciary principles that are common to both brokers and investment advisors including an obligation to act in the investor’s best interest and prohibiting an advisor from placing their own interests ahead of the investor’s. There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which require brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations include 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.
Another aspect of the care obligation is focusing on the client’s specific needs which brokers must reasonably understand through obtaining information for the client’s investment profile. In completing a customer’s investment profile the advisor should include information such as the investor’s investment time horizon; liquidity needs; risk tolerance; experience with various investment vehicles; investment objectives and financial goals; assets and debts including outside investment accounts; marital status; tax information; age; and other relevant information that may be individual to the investor that the advisor would need to know to properly render advice or provide services. Using the foregoing information, the associated person then must consider reasonably available investment option to accomplish the investor’s goals as well as alternative investment options that may be cheaper or other important qualities. Finally, the advisor must conclude that there is a reasonable basis to believe that the recommendation being provided is in the investor’s best interest. Finally, an advisor must also analyze the specific account features offered and determine whether their client can benefit from them in order to meet their care obligations. While securities and investments come with costs that must be considered, the type of securities account also has changes the cost equation for the investor and can change the retail customers’ future investment returns. The associated person must consider the different types of securities accounts for their client and determine whether or not the cost or features are reasonably needed for the client or if the customer’s current account costs and features are superior to solutions available to the advisor. In any event, the type of account and services recommended must be in the investor’s best interest.
Molo has been in the securities industry for more than 20 years. Molo has been registered as a Broker with Edward Jones since 2001.
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.