Securities Lawyers Blog
The securities attorneys at Gana Weinstein LLP have been investigating previously registered broker Matthew Kerby (Kerby). According to BrokerCheck Records, in January 2018, Kerby was barred from the financial industry by the Financial Industry Regulative Authority (FINRA) for withholding crucial documents from FINRA involving a prior investigation in which Kerby allegedly converted elderly customer funds. Kerby consents to the sanctions that he received FINRA’s request and failed to produce documents. By refusing to provide requested documents, Kerby violated FINRA Rules 8210 and 2010. At this time it is unclear the extent and nature of the appropriation that occurred.
In addition, Kerby has been subject to termination from employment. Kerby’s employer, Edward Jones, terminated Kerby in November 2017 alleging that Kirby misappropriated and converted customer funds to utilize them for personal benefit.
Kerby has also been subject to a customer complaint. In November 2017, a customer alleged that Kerby misappropriated the customer’s funds by taking the money out of the account and converting the funds without customer authorization. The dispute was settled at $78,985.80.
FINRA prohibits brokers and firms from using customer’s funds or securities for improper use. Improper use often includes “conversion of funds” where the broker takes ownership of a client’s funds or assets without permission.
Brokerage firms also are under obligation to all of its customers to properly monitor and supervise its employees. The duty to supervise is a critical component of the securities regulation. Regulatory authorities such as the Securities Exchange Commission (SEC) and FINRA have steadily heightened the supervisory obligations of brokerage firms in recent years. Supervisors are mandated to properly respond to indications of irregularity in order to prevent further improper conduct by their brokers. These indications are often times referred to as “red flags.” The importance of proper supervision is manifested in various types of securities activities. Brokerage firms are responsible for monitoring a broker’s investment recommendations to clients, outside business activities, and representations to investors among other obligations. In addition, brokerage firms are responsible for conducting due diligence on the securities products they sell and devising a written supervisory system to achieve compliance with the securities laws.
Kerby entered the securities industry in 2007. From August 2007 to November 2017, Kerby was registered with Edward Jones. Kerby 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 misappropriated funds and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover