Securities Lawyers Blog
The securities attorneys at Gana Weinstein LLP are investigating claims against Summit Brokerage Services (Summit Brokerage) broker Michael Mathias (Mathias). According to BrokerCheck records, Mathias has been subject to twenty customer complaints, two of which are still pending. The majority of the complaints concern the unsuitable recommendation of variable annuities.
Most recently, in August 2017, a customer alleged that Mathias recommended unsuitable investments to customers, requesting $433,687 in damages. This dispute is currently still pending.
In 2001, a customer alleged that Mathias did not reimburse client for deferred sales charges. The customer further alleges that the annuity investment recommended was not suitable for him.The client is requesting $10,000 in damages. This dispute is currently still pending.
Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation, the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.
Variable annuities have long been problem products for regulators. In fact, the Securities and Exchange Commission (SEC) released a publication entitled: Variable Annuities: What You Should Know encouraging investors to ask questions about the variable annuity before investing. In many cases, the benefits of variable annuities are often outweighed by the terms of the contract that include exorbitant expenses such as surrender charges, mortality and expense charges, management fees, market-related risks, and rider costs.
The number of complaints against Mathias 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.
Mathias has been in the securities industry for 32 years and has been registered with Summit Brokerage since 2005. From March 2005 to June 2005, Mathias was registered with WRP Investments, Inc. From June 2000 to December 2004, he was registered with National Planning Corporation. From 1986 to 2000, he was registered with Gerald S. Berger, Inc.
Investors who have suffered losses may be able recover their losses through securities arbitration. The investment attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.