FINRA Suspends Mason Gann for Unauthorized Trades at Berthel Fisher

shutterstock_184433255-300x228The investment fraud attorneys at Gana Weinstein LLP are currently investigating previously registered broker Mason Gann (Gann). According to BrokerCheck Records, Gann has been subject to a regulatory matter in which the Financial Industry Regulatory Authority (FINRA) sanctioned Gann for violations of the securities laws concerning unauthorized trading. In addition, Gann has been subject to three customer disputes, two of which are still pending.  Gann has also been subject to termination from employment and a tax lien.

In February 2018, Gann was terminated from Berthel Fisher & Company Financial Services, Inc. (Berthel Fisher) for allegedly violating the firm’s conditions involving heightened supervision.

Subsequently, in April 2018, FINRA found that Gann had exercised discretionary power in 6 non-discretionary customer accounts without the customer’s prior written approval. By doing so, Gann was in violation of NASD ConductRule 2510 (b) and FINRA Rule 2010.  Gann executed a total of 500 discretionary trades at previous firm of employment Berthel Fisher, where all discretionary trades were prohibited. Without admitting or denying the findings, Gann consented to the sanctions and to the entry of findings. Consequently, FINRA imposed a $5,000 fine and 20 day suspension.

In addition, Gann has been subject to multiple customer disputes. In May 2018, a customer alleged that from 2012 to present time, Gann placed the customer in unsuitable investments that were too risky for the customer’s investment needs. The customer also alleges that the firm neglected their duty to supervise Gann’s activities in the account . This dispute is currently still pending.

In addition, in January 2018, a customer alleged that Gann placed the customer in investments that were unsuitably risky for the customer’s investment needs and that Gann did not properly supervise the account. The customer is requesting $75,000 in damages. This dispute is currently still pending.

 

Advisors are not allowed to place trades without a customer’s prior consent absent a power of attorney to trade with discretion. Unauthorized trading occurs when a broker sells securities without the prior consent from the investor. All brokers are under an obligation to first discuss trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). The Securities Exchange Commission (SEC) has found that no disclosure could be more important and material to an investor than to be made aware that trading is taking place. Unauthorized trading is often a gateway violation to other securities violations including churning, unsuitable investments, and excessive use of margin.

The number of complaints against Gann 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.

Gann entered the securities industry in 1999. From July 2012 to February 2018, Gann was registered with Berthel Fisher. From December 2004 to June 2012, Gann was registered with Milkie/Ferguson Investments, Inc. From October 1999 to December 2004, Gann was registered with Wachovia Seucirites, LLC. Gann is currently not registered with any firm.

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 unauthorized trading and firm’s failure to supervise. Our consultations are free of charge and the firm is only compensated if you recover.