FINRA Bars Matthew Singer for Alleged Unsuitable Option Investments

shutterstock_7947664-300x200Investment attorneys with our offices are currently investigating previously registered broker Matthew Singer (Singer). According to BrokerCheck Records,  in March 2018, Singer was barred from the financial industry for failing to appear at an on-the-record testimony concerning allegations that he was recommending unsuitable investments to customers while employed at Morgan Stanley.  According to the Financial Industry Regulatory Authority (FINRA), Singer consented to the sanction and bar due to the fact that he refused to appear to the testimony.   For failing to appear for testimony, Singer was in violation of FINRA Rules 8210 and 2010 and automatically barred.

In addition, Singer has been subject to multiple customer complaints. In December 2016, a customer alleged that from May 2015, to January 2016, Singer misrepresented investments and executed unauthorized trades in the customer account regarding option investments. The case was settled at $60,000.

In February 2016, a customer alleged that Singer recommended unsuitable options to the customer.  The customer requested $381,929 in damages.  In October 2015, a customer alleged that from June 2015, Singer recommended highly risky and unsuitable investments to the customer.

 

Brokers must make recommendations that are suitable for their client.  The suitability analysis requires there to be a reasonable basis for the recommendation that is being made based upon the broker’s and the firm’s investigation and due diligence on the securities or investment product being offered.  Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors.  Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives.  Many investments are suitable only for a narrow band of investors and not the general investing public.

The number of complaints against Singer are unusual compared to his peers.  According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015.  Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters.  However, studies have found that there are fraud hotspots such as certain parts of California, New York or Florida, where the rates of disclosure can reach 18% or higher.  Moreover, according to the New York Times, BrokerCheck may be becoming increasing inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.

Singer entered the securities industry in 2006. From July 2013 to March 2016, Singer was registered with Morgan Stanley. From February 2013 to July 2013, Singer was registered with FBN Securities, Inc. From January 2013 to February 2013, Singer was registered with Ascendiant Capital Markets, LLC. From October 2011 to January 2013, Singer was registered with Capstone Investments. From October 2010 to October 2011, Singer was registered with C.L. King & Associates, Inc. From September 2008 to September 2010, Singer was registered with Hudson Securities, Inc.

Investors who have suffered losses may be able recover their losses through securities arbitration.  The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of unsuitable investments and firms’ failure to supervise their employees. Our consultations are free of charge and the firm is only compensated if you recover.