Calton & Associates – Broker Misconduct & Regulatory Actions

Investor Alert: Calton & Associates (CRD#: 20999)

Are you concerned about your investments with Calton & Associates, LLC (CRD#: 20999)? The White Law Group is investigating potential securities claims involving the firm’s alleged supervisory failures and broker misconduct. Calton & Associates, based in Tampa, Florida, reportedly has 19 disclosure events on its record, including 13 regulatory actions and 6 arbitration claims.

Recent Regulatory Actions Involving Calton & Associates

May 2025 – $75,000 Fine for Widespread Reporting and Supervisory Failures

According to a recent FINRA Letter of Acceptance, Waiver, and Consent (AWC), Calton & Associates reportedly violated multiple regulatory rules over a span of several years:

• Failure to Disclose Mark-Ups and Mark-Downs
  Between May 14, 2018, and April 2021, Calton violated MSRB Rule G-15 and FINRA Rules 2232 and 2010 by failing to disclose required mark-up and mark-down information on hundreds of retail customer confirmations.

• Inaccurate Trade Time Reporting
  From July 2018 to May 2022, the firm failed to report the correct time of trade on more than 7,800 municipal securities transactions and over 1,000 TRACE-eligible securities transactions, violating MSRB Rule G-14, FINRA Rule 6730, and Rule 2010.

• Supervisory Failures
  From May 2018 through July 2024, Calton failed to maintain a supervisory system reasonably designed to comply with these reporting obligations, in violation of MSRB Rule G-27, FINRA Rule 3110, and Rule 2010.

As a result, Calton was censured and fined $75,000.

May 2021 – $250,000 Fine and Restitution for ETP Sales Supervision Lapses

In another AWC, FINRA reportedly sanctioned Calton for supervisory failures related to the sale of non-traditional and volatility-linked exchange-traded products (ETPs):

• From February 2014 to February 2020, Calton permitted its representatives to sell complex ETPs without a reasonable supervisory system in place to understand or monitor the risks of these products.

• Customers reportedly held these risky products for long periods, contrary to their intended short-term nature, resulting in significant investor losses.

FINRA found Calton in violation of NASD Rule 3010(a), and FINRA Rules 2111, 3110(a), and 2010. The firm was fined $250,000 and ordered to pay $472,007.20 in restitution.

Failure to Provide CMO Disclosures and Additional Violations

During the period January 2014 to June 2018, Calton allegedly:

• Failed to provide required educational materials to customers purchasing Collateralized Mortgage Obligations (CMOs), violating FINRA Rule 2216(b)(2).

• Failed to implement supervisory procedures to comply with these disclosure rules.

• Assigned a supervisor with a conflict of interest and permitted a non-registered individual to accept securities orders, violating FINRA Rules 3110(b)(6), 1210, and NASD Rule 1031.

Calton & Associates: Other Notable Regulatory Events

March 2019 – SEC Charges for Fiduciary Duty Breaches

According to the SEC, Calton allegedly breached its fiduciary duty in connection with its mutual fund share class selection practices. Between 2014 and 2018, the firm and its representatives received 12b-1 fees without adequately disclosing conflicts of interest and failed to recommend lower-cost share classes. Calton was censured and ordered to pay $305,044 in disgorgement and interest.

November 2016 – TRACE Reporting Failures

Calton submitted an AWC and was fined $5,000 for failing to report TRACE-eligible securities transactions on time, violating FINRA Rule 6730(a).

Broker Misconduct and Customer Complaints

Broker-dealers like Calton & Associates have a duty to supervise financial advisors and prevent misconduct. Firms that fail to detect or prevent unsuitable recommendations or fraudulent activities may be liable for losses through FINRA arbitration.

Several Calton advisors have reportedly been involved in serious misconduct:

• Chris Kubiak (Brookfield, WI) – Sentenced to 30 months in prison in 2019 for allegedly stealing $370,000 from elderly clients. Barred by FINRA in 2018.

• Randy Burke (Hickory, NC) – Barred in 2015 after allegedly misappropriating funds from elderly investors for personal use and selling unauthorized investments.

Understanding FINRA Arbitration vs. Class Action Lawsuits

While some investors may receive notice of class action settlements, pursuing a claim through FINRA arbitration is often more effective. Here’s why:

• Individual attention: FINRA arbitration allows investors to present unique claims tailored to their losses.

• Faster resolution: Most FINRA arbitration cases resolve in 12–18 months, while class actions may take years.

• Potentially larger recovery: Investors may recover more through arbitration than through class action distributions.

Learn more: FINRA Arbitration vs. Class Actions – What Investors Should Know

FAQs about Calton & Associates

1. What are non-traditional ETPs and why are they risky?
Non-traditional and volatility-linked ETPs are designed for short-term trading strategies. Holding them long-term, especially without proper supervision, can result in significant losses.

2. Can I recover losses from Calton & Associates?
Possibly. If your financial advisor made unsuitable recommendations or the firm failed to supervise them properly, you may be able to file a FINRA arbitration claim to seek recovery.

3. How do I know if I have a valid claim?
Contact a securities attorney to review your investments and discuss your legal options. Our firm provides free consultations to help you determine if you qualify for recovery.

Free Consultation with a Securities Fraud Attorney

The White Law Group is a national securities arbitration law firm with offices in Chicago and Seattle, dedicated to helping investors recover losses due to broker and firm misconduct.

If you suffered losses investing with Calton & Associates, please call 888-637-5510 or visit www.whitesecuritieslaw.com for a free consultation with one of our experienced FINRA attorneys.