Madison Avenue Securities Lawsuits & Regulatory History
Madison Avenue Securities LLC (CRD# 23224) is a national financial-advisory firm headquartered in San Diego, California, with approximately $1 billion in assets under management. According to the firm’s FINRA BrokerCheck profile, Madison Avenue Securities has six disclosures on its record — five regulatory actions and one customer arbitration.
Arbitrations on a broker-dealer’s CRD (Central Registration Depository) record refer to disputes resolved through the FINRA arbitration forum, the self-regulatory organization that oversees brokers and brokerage firms. FINRA and the Securities and Exchange Commission (SEC) may impose censures, fines, suspensions, or restitution that can materially affect a brokerage firm’s reputation.
FINRA Sanctions Madison Avenue Securities for Supervisory Failures
According to a recent FINRA Letter of Acceptance, Waiver, and Consent (AWC No. 2023077021301), Madison Avenue Securities LLC was censured and fined $125,000 for supervisory and recordkeeping failures involving consolidated reports provided to customers.
From January 2020 to the present, the firm allegedly distributed or made available consolidated reports that contained inaccurate or incomplete information about whether certain assets were held away from the firm. FINRA also found that Madison Avenue:
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Failed to maintain records of which reports were sent to customers.
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Lacked a reasonable supervisory system to review and retain the reports.
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Violated FINRA Rules 2210(d)(1), 3110, 4511, and 2010, along with Section 17(a) of the Securities Exchange Act of 1934 and Exchange Act Rule 17a–4(b)(4).
This is not the firm’s first regulatory issue. In 2016, Madison Avenue consented to a $75,000 fine and censure for similar failures related to consolidated reports, including inadequate supervisory procedures and retention violations.
FINRA Sanctions and Oversight Failures
February 14, 2024 – AML Compliance Failures
FINRA fined the firm $35,000 for failing to implement an effective anti-money laundering (AML) compliance program between 2019 and 2021. The firm reportedly did not reasonably detect and report suspicious transactions.
October 31, 2023 – SEC Sanction for Share Class Disclosure Failures
The SEC charged the firm for placing clients in more expensive mutual fund share classes without proper disclosure of conflicts. Madison Avenue paid $122,879 in disgorgement and interest.
May 2, 2023 – Mutual Fund Supervisory Failures
FINRA found that the firm failed to ensure investors received proper sales charge discounts in mutual fund transactions from 2016 to 2018. Madison Avenue was fined $50,000 and ordered to pay $63,296 in restitution plus interest.
May 2022 – SEC Charges for Fiduciary Breaches
The SEC charged the firm for breaching its fiduciary duty by failing to disclose conflicts of interest and not seeking best execution. Madison Avenue paid a $150,000 fine, $579,523 in disgorgement, and $73,649 in interest.
June 2013 – Failure to Supervise Private Placements
FINRA sanctioned Madison Avenue with a $12,500 fine after a representative engaged in private securities transactions without adequate supervision, violating NASD Rule 3010.
December 2016 – Inadequate Supervision of Account Reports
FINRA censured the firm and fined it $75,000 for failing to implement written supervisory procedures concerning the production and distribution of consolidated reports, which may have included inaccurate asset valuations.
Madison Avenue Securities: Broker Misconduct
May 2018 – Broker David Barber Barred
FINRA barred broker David Lloyd Barber for unauthorized trading and exercising discretion in customer accounts without written authorization. Madison Avenue was named in a related arbitration where more than $1.6 million in damages was awarded to an investor.
August 2019 – Broker Bryan Joseph Clark Barred
FINRA barred Bryan Clark after he refused to provide testimony during an investigation into potential outside business activity and private securities transactions.
Investor Claims Involving Alternative Investments
April 2020 A customer alleged misrepresentations and over-concentration in alternative investments, seeking $100,000 in damages (FINRA Case 20-01095).
January 2018 An all-public FINRA arbitration panel awarded a California investor $1.67 million for churning, unauthorized trading, unsuitable recommendations, breach of fiduciary duty, and failure to supervise (FINRA Case 16-01450). Broker David Barber was ordered to pay $1.2 million; the firm was liable for the balance.
March 2016 $913,000 Awarded in FINRA Arbitration A customer claimed the firm breached fiduciary duty, churned the account, executed unauthorized trades, and provided unsuitable recommendations. The FINRA panel awarded more than $913,000 in compensatory damages.
Broker Supervision Failures
Broker-dealers are legally required to establish systems that reasonably detect and prevent misconduct. Firms that fail to supervise may be held liable for investor losses arising from their representatives’ negligence or fraud.
Why Hire a FINRA Arbitration Lawyer
When a broker’s misconduct causes losses, the employing firm can be pursued through FINRA arbitration. Experienced counsel can:
- Evaluate the strength of your claim.
- Draft and file the Statement of Claim.
- Present evidence, question witnesses, and negotiate settlements.
FINRA arbitration is typically faster and less expensive than traditional court litigation.
Contact Us
The White Law Group is a national securities-fraud and investor-protection law firm with offices in Chicago, Illinois and Seattle, Washington. If you purchased investments through Madison Avenue Securities and have concerns, call 888-637-5510 for a free consultation.
Frequently Asked Questions (FAQs)
- What kinds of regulatory problems has Madison Avenue Securities faced?
The firm’s record lists supervisory failures, unsuitable investment recommendations, and fiduciary-duty breaches, leading to FINRA fines and SEC settlements. - Can I recover losses from Madison Avenue Securities through FINRA arbitration?
Yes. If your broker’s actions were unsuitable or fraudulent, you may file a FINRA arbitration claim seeking compensation for your investment losses. - How long does FINRA arbitration take?
While timelines vary, FINRA arbitration generally resolves within 12–18 months, faster than most civil court cases, and can result in monetary awards to harmed investors.
