Brokerage Firm Review: Moloney Securities Co., Inc.

Moloney Securities Co., Inc. (“Moloney Securities”) (CRD#38535) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated Moloney Securities, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.

If you believe you have a claim against Moloney Securities, you should strongly consider hiring an investment fraud lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Can I Sue Moloney Securities?

If you’ve lost money caused by Moloney Securities and/or its employees’ misconduct then the answer is, YES, you can sue Moloney Securities, but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Moloney Securities in FINRA arbitration proceedings but WIN that arbitration. The easiest way to know if you have a viable case against Moloney Securities is to call Attorney Pearce at our office at 800-732-2889.

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

What is Moloney Securities?

Moloney Securities (CRD#38535) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors.

As a registered broker-dealer, Moloney Securities is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests.

A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.

Moloney Securities Has Many Different Regulatory Problems 

Moloney Securities’ rapid growth has not been without consequences. There have been approximately 9 state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) for a violation(s) of investment-related rules or regulations. In addition, there have been customer complaints filed against Moloney Securities for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record. 

We have reported and written about these regulatory problems and customer complaints over many years. Moloney Securities is a repeat offender: there are over 9 FINRA-reported proceedings citing the firm with one form of supervisory lapses or another.

A Brief Overview of Some of the Regulatory Problems Moloney Securities Has Faced Over the Years*

Moloney Securities has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its Supervisory Failures are below:

FINRA Censures Moloney Securities for Failing to Disclose Material Information Related to Limited Partnership Interests Sold to Customers

Brief Overview: Without admitting or denying the findings, Moloney Securities consented to the sanctions and to the entry of FINRA findings that it negligently omitted material facts by failing to tell investors in an offering related to an alternative asset management firm that the issuer failed to timely make required filings with the SEC. FINRA said while the firm received a letter from the asset management firm notifying it of delays and the asset management firm’s stated intention to complete a forensic audit, it sold limited partnership interests after the date of the letter. In connection with the sales, firm representatives did not inform the customers the limited partnerships had not timely filed their financials with the SEC or the reasons for the delay. FINRA stated the delay in filing audited financial statements was material information that should have been disclosed. As a result, the firm was censured and ordered to pay over $268,000 plus interest in disgorgement.

FINRA Censures and Fines Moloney Securities for Failure to Comply with Suitability Rule Relating to Concentration

Brief Overview: Without admitting or denying the findings, Moloney Securities consented to the sanctions and to the entry of FINRA findings that it failed to establish and maintain a supervisory system reasonably designed to achieve compliance with FINRA’s suitability rule with respect to concentration in high-risk products. FINRA said the firm’s written supervisory procedures contained a discussion of monitoring for qualitative suitability, including procedures related to speculative, low-priced securities, but no discussion of concentration in high-risk products. Further, the firm did not provide any training to its regional managers on reviewing the suitability of recommendations in such products, and it did not issue any instructional materials or alerts, such as compliance bulletins, addressing these issues. As a result, the firm was censured and fined $100,000.

FINRA Censures and Fines Moloney Securities for Failure to Investigate Registered Representatives Activities

Brief Overview: Without admitting or denying the findings, Moloney Securities consented to the sanctions and to the entry of FINRA findings that it failed to adequately investigate the conduct of one of its representatives after learning that a customer had filed a complaint against him. FINRA said a customer notified FINRA about several concerns she had pertaining to the representative registered with the firm at the time, specifically a loan she made to the representative, the representative’s repeated failures to sell her interest in certain antique medals, which she maintained had been purchased at the representative’s recommendation, and the nature and extent of her investments with the representative. FINRA notified the firm of the customer’s complaint and proceeded to commence an investigation into the matter. As a result of the investigation, the firm was censured and fined.

FINRA Censures and Fines Moloney Securities for Sales of Non-Traditional Exchange-Traded Funds to Customers

Brief Overview: Without admitting or denying the findings, Moloney Securities consented to the sanctions and to the entry of FINRA findings that it allowed its representatives to recommend and sell non-traditional exchange-traded funds to customers. FINRA stated that the firm’s written supervisory procedures did not address the sale or supervision of non-traditional ETFs, and the firm also did not conduct due diligence of non-traditional ETFs before allowing its representatives to recommend and sell them to customers. FINRA also stated that despite the unique features and notable risk factors of non-traditional ETFs, the firm did not provide its representatives or supervisors with any training or other guidance specific to whether non-traditional ETFs might be appropriate for their customers. FINRA included that the firm failed to establish and maintain a supervisory system, including written policies and procedures, regarding the sale of nontraditional ETFs that was reasonably designed to achieve compliance with applicable securities laws and regulations. As a result, the firm was censured and fined.

NASD Censures and Fines Maloney Securities for Failure to Report Trades in a Timely Manner

Brief Overview: Without admitting or denying the allegations, Maloney Securities consented to the described sanctions that the firm failed to report to trace the correct time of trade execution in transactions in trace-eligible securities. The NASD also said the firm failed to report trace transactions in trace-eligible securities executed on a business day during trace system hours within 45 minutes of the time of execution. The NASD also found that the firm’s supervisory system did not provide supervision reasonably designed to achieve compliance with respect to applicable securities laws and regulations, including NASD rules concerning trace. As a result, the firm was censured and fined. 

Why Does Moloney Securities Have So Many Regulatory Problems And Customer Complaints?

Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of many franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.

The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers. 

Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.

These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.

Did Moloney Securities Advisor Misconduct Cause You Investment Losses?

When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Moloney Securities is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Moloney Securities without representation with an attorney about their complaints and have their complaints denied.

Related Read: Can You Sue Your Brokerage Firm?

Investment Losses? We Can Help

Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.

Get A Free Consultation

or, give us a ring at (800) 732-2889.

Consult With An Attorney Who Recovers Investment Losses Caused By Moloney Securities Today!

The investment loss attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Moloney Securities cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.

Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.

Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $170 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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