South Florida Arbitration & Litigation Lawyer Blog
Selling Away and Outside Business Activity FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
January, 2012:
Matthew Morgan Dooley (CRD #2507851, Registered Representative, Mill Valley, California) was barred from association with any FINRA member in any capacity. The sanction was based on findings that Dooley failed to respond to FINRA requests for information and documents. The findings stated that Dooley recommended that customers purchase exchange-traded funds (ETFs) that were speculative instruments designed for intra-day trading, when he knew the customers’ investment objectives were growth and income, not speculation and day trading. The fact that Dooley caused the customers to hold the ETFs in their accounts for longer than a day suggests that he did not understand the purpose of the ETFs and the associated risks, so that Dooley’s recommendation to purchase them could not have been based upon reasonable grounds. The findings also stated that these customers lost a total of approximately $45,307. Dooley was paid a commission on most of the transactions at issue in the customers’ accounts. The findings also included that one of the customers contacted Dooley to complain about the losses associated with the ETF trading. The customer subsequently told Dooley to invest in bonds. Instead of following this instruction, Dooley continued to purchase and sell the ETFs. FINRA found that the customer contacted the president of Dooley’s member firm to complain about Dooley’s failure to follow her instructions. The firm’s president contacted Dooley to investigate the complaint; Dooley then contacted the customer and gave her a handwritten note stating that he would pay her $1,000 per month for 18 months, which approximated the $18,764 loss the customer suffered in her account. FINRA also found that Dooley paid the customer $2,500 but did not notify anyone at the firm about these payments and did not obtain the customer’s written authorization to make these payments, and Dooley had not previously transferred any funds into the customer’s account. (FINRA Case #2009020930301).