Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor John Maccoll (Maccoll), formerly associated with UBS Financial Services Inc. (UBS) in Birmingham, Michigan was barred by FINRA. In addition, The Securities and Exchange Commission (SEC) charged Maccoll with defrauding his brokerage customers out of nearly $4 million in an investment scam.
According to the SEC’s complaint, Maccoll used high pressure sales tactics to solicit at least 15 of his retail brokerage customers to invest in what he described as a highly-sought-after private fund investment. The SEC claims that most of the victims were elderly and retired and invested through their retirement accounts. The SEC claims that Maccoll told his customers that the purported fund investment would allow them to diversify their portfolios, receive annual investment returns as high as 20%, and give them investment growth potential that was better than the growth they received in their brokerage accounts. The SEC alleges that these statements were false and that Maccoll did not invest the customers’ money but in fact stole it for his own personal use. The SEC charged that $3.6 million was spent on his own personal expenses. To conceal the scheme, the SEC alleged that Maccoll instructed his customers not to tell others about the purported fund investment, provided some of his customers with fake account statements reflecting fictitious returns, and paid over $400,000 in Ponzi-like payments to certain of the customers to keep the scheme alive.
In conjunction with the SEC’s action, the U.S. Attorney’s Office for the Eastern District of Michigan filed criminal charges against Maccoll.
When advisors convert or misappropriate funds they often created businesses or other vehicles to serve as a cover for the theft of funds. However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
Maccoll entered the securities industry in 1977. From January 2006 until March 2018 Maccoll was associated with UBS out of the firm’s Birmingham, Michigan office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Investors may be able recover their losses through securities arbitration. The 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.