Written by The White Law Group• March 13, 2023• 3:01 pm• Blog, FINRA SEC Sanctions, Securities Fraud Articles

Madison Avenue Securities Regulatory History Overview

Madison Avenue Securities Review - , featured by top securities fraud attorneys, The White Law Group

The White Law Group reviews the regulatory history of Madison Avenue Securities.

Madison Avenue Securities LLC ((CRD# 23224) is a national financial advisory firm headquartered in San Diego, CA. The firm has $1.0 billion under management. According to their FINRA Broker Report, the firm reportedly has 6 disclosures on their broker record including 5 regulatory actions, and 1 arbitration.

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Arbitrations on a broker-dealers CRD (Central Registration Depository) refer to the resolution of disputes between a broker-dealer and a client or between broker-dealers themselves through the FINRA arbitration process. FINRA is the self-regulator that oversees brokers and brokerage firms.

FINRA and the Securities and Exchange Commission may impose regulatory actions against a broker-dealer such as censures, fines, suspensions and restitution, among others. Regulatory actions can have serious consequences for a broker-dealer’s profile and reputation. Madison Avenue Securities has 5 regulatory actions disclosed on their broker report, including the following:

Supervisory Failures

According to a Letter of Acceptance Waiver and Consent on May 2, 2023, FINRA censured and fined Madison Avenue Securities for supervisory failures. From January 2016 through December 2018, Madison Avenue failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to supervise the suitability of mutual fund transactions executed through its clearing firm, particularly with respect to potential available sales charge discounts. Madison Avenue reportedly violated FINRA Rules 3110 and 2010. The firm is required to pay $50,000 in fines and restitution of $63,296 plus interest.

December 2016 – FINRA sanctioned the firm in connection to allegations it failed to put in place written procedures of a supervisory system regarding the production and distribution of consolidated reports. The firm was censured and issued a fine of $75,000.

June 2013 – FINRA censured and fined Madison Avenue Securities $12,500 in connection with allegations that one of its representatives engaged in private securities transactions while involved in private placement offerings.

Madison Avenue Securities Settles Charges with the SEC

In May 2022, Madison Avenue Securities settled charges with the Securities and Exchange Commission regarding allegations that the firm breached its fiduciary duty by failing to provide full and fair disclosures regarding conflicts of interest.

The firm also allegedly breached its duty to seek best execution by causing advisory clients to invest in share classes of mutual funds when share classes of the same funds were available to clients that presented a more favorable value for these clients; firm allegedly breached its duty of care by failing to undertake an analysis to determine whether the particular mutual fund share classes and money market funds it recommended were in the best interests of its advisory clients; and failed to adopt and implement written compliance policies and procedures reasonably designed to prevent these breaches of the firm’s duties.

Madison Avenue Securities agreed to pay a $150,000 fine, disgorgement of $579,523.76 and prejudgment interest of $73,649.93, and to a remediate the issues.

Madison Avenue Securities: Broker Misconduct and Customer Complaints

All broker-dealers have a responsibility to adequately supervise their employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

There have been several cases of registered representatives employed by Madison Avenue Securities who were allegedly involved in broker misconduct and fraudulent activities.

June 2021- We previously reported that Madison Avenue financial advisor Jeffrey Dixson of Vancouver, Washington reportedly has 24 customer complaints filed against him and the firm for allegations of unsuitable investments including improper sales of GPB Capital offerings.

According to Dixson’s broker report, he was reportedly affiliated with Madison Avenue Securities from November 2007 until December 2019.

March 2018 – FINRA barred David Barber after allegations that he engaged in unauthorized trading in the accounts of his customers, exercised discretion in customer accounts without written authorization, or otherwise violated FINRA’s rules.

August 2019 – FINRA barred Madison Avenue Securities Broker Bryan Joseph Clark after he refused to appear and provide on-the-record testimony during FINRA’s investigation into whether he willfully failed to disclose a bankruptcy, failed to disclose outside business activities and participated in private securities transactions.

FINRA Claims Alleging Unsuitable Investments

April 2020 – a Madison Avenue Securities customer filed a FINRA claim alleging misrepresentations and omissions had been made regarding alternative investments, poor advice and overconcentration in alternative investments. The customer requested damages of $100,000.00 FINRA Case No. 20-01095.

January 2018 – an all-public FINRA arbitration panel awarded a California investor the entire amount of her churning claim against broker David Lloyd Barber and his firm, Madison Avenue Securities. (FINRA Case No. 16-01450) FINRA found Barber and Madison Avenue liable for churning, unauthorized trading, unsuitable trading, breach of fiduciary duty and failure to supervise.

The total amount of compensatory and punitive damages was $1.67 million. Barber was ordered to pay $1.2 million in compensatory and punitive damages. Madison Avenue Securities was reportedly ordered to pay the remainder.

Madison Avenue Securities Client Awarded $913,000 in FINRA Lawsuit

In 2016 a customer filed a lawsuit that the firm breached its fiduciary duty, churned investments, committed fraud, made unsuitable investment recommendations, executed unauthorized transactions, failed in its supervisory duties, and acted negligently. The customer was awarded more than $913,000.

Failure to Supervise – Madison Avenue Securities

All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

Hiring a FINRA Attorney

When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.

If your broker has defrauded you, you may be able to file a claim with FINRA to seek resolution through arbitration. FINRA arbitration can be a complex and technical process, and having an experienced attorney who is knowledgeable about securities law can greatly increase your chances of success.

The FINRA attorneys at the White Law Group can help you with many aspects of the arbitration process including evaluating the merits of your claim and determining whether you have a strong case for arbitration.

The White Law Group can assist you in drafting a statement of claim that accurately reflects the allegations of fraud and the damages you are seeking. They will also represent you at the arbitration hearing, present evidence and make arguments on your behalf. They can also negotiate a settlement on your behalf, which may be an option to consider before going to arbitration.

Working with a FINRA attorney can help ensure that your interests are protected throughout the FINRA arbitration process, and that you have the best possible chance of achieving a favorable outcome. Keep in mind, FINRA arbitration is generally a faster and less expensive alternative to a traditional court proceeding.