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Written by 7:32 pm Blog, Current Investigations, FINRA SEC Sanctions

Moors & Cabot Inc.: Regulatory History Overview

Moors & Cabot Inc. Review featured by top securities fraud attorneys, the White Law Group

The White Law Group is reviewing the regulatory history of Moors & Cabot Inc.  

Moors & Cabot Inc. (CRD#: 594/SEC#: 801-48726,8-23060), headquartered in Boston, Massachusetts, is a dual registered national financial advisory firm.  According to FINRA, the firm reportedly has 35 disclosures on its broker record including 30 regulatory actions, 3 arbitrations and 2 bonds. 

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.   

Regulatory actions taken against a broker-dealer may include censures, fines, suspensions and restitution, among others. They can have serious consequences for a broker-dealer’s profile and reputation. Moors & Cabot Inc. has 30 regulatory actions disclosed on their broker report, including the following: 

FINRA Sanctions Moors & Cabot Inc.    

On June 25, 2020, FINRA reportedly censured and fined Moors & Cabot Inc. $250,000 for its alleged failure to disclose in writing to customers approximately $7.5 million in compensation it earned for trades in preferred securities effected in the customers’ accounts. The findings stated that the firm acted in a principal capacity, purchasing preferred shares from one firm customer, and then selling those shares on the same day to a different firm customer, often within minutes. The firm reportedly consented to the sanctions without admitting or denying the findings. 

Moors & Cabot also allegedly committed trade reporting violations, failed to create and maintain required records and reportedly failed to establish and maintain a supervisory system. 

High Risk Private Placement Sales Targeting Seniors

In 2018, Moors & Cabot was part of a sweep targeting Massachusetts broker dealers who sold high risk private placement investments. 

Massachusetts Securities regulators launched an investigation into sales practices after a Wall Street Journal in-depth report announced that brokerage firms with high numbers of disclosure events are selling billions of dollars in private placement investments, often targeting seniors. 

According to the Secretary of the Commonwealth, the sweep included Moors & Cabot and nine other broker-dealers based in Massachusetts that sold high risk private placements and had 15 percent or more of agents with current disciplinary incidents. 

Moors & Cabot Inc. 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 Moors & Cabot Inc. who were allegedly involved in broker misconduct and fraudulent activities.  

This week we reported that FINRA has indefinitely suspended Moors & Cabot broker Damian Baird after allegations of broker misconduct.  

Alleged Missappropriation of Customer Funds

In 2018, FINRA reportedly barred Robert Todd Clark after allegations that he withdrew money without customer authorization, from a customer’s brokerage account for which he was the trustee, and then used the money for his own purposes. 

According to Clark’s FINRA BrokerCheck report, he was registered with Moors & Cabot in Boston, MA from May 2013 until he was fired in July 2018 because he “Violated firm policy by failing to obtain prior approval for an alleged loan the representative received from a customer. 

Unauthorized Trades

In 2017 FINRA reportedly barred Moors & Cabot advisor Scott Sibley of Boca Raton, Florida, after he effected 900 unauthorized transactions in 2 accounts belonging to 1 customer. The findings further stated that of the 900 securities purchases and sales, 139 were allegedly equity options where Sibley sold uncovered put option contracts or closed put option contracts for the customer. In addition to effecting purchases and sales without written authorization, Sibley purportedly caused the customer to carry a margin debit balance without the customer’s authorization, knowledge, or consent. Sibley reportedly has 23 customer complaints on his broker record. 

Failure to Supervise – Moors & Cabot Inc. 

The FINRA supervision rule (FINRA Rule 3110) helps to ensure that firms have effective supervisory systems in place to protect investors and maintain the integrity of the securities markets.    

FINRA Rule 3110 is designed to protect investors by requiring firms to establish and maintain a supervisory system that is reasonably designed to achieve compliance with applicable securities laws, regulations, and FINRA rules. This helps to ensure that the firm and its associated persons conduct business in an ethical and compliant manner, reducing the risk of harm to investors.    

The rule requires firms to designate one or more qualified individuals to be responsible for supervising the activities of the firm and its associated persons. These individuals are responsible for ensuring that the firm’s supervisory procedures are effective in detecting and preventing violations of securities laws and regulations.    

Firms must also review and monitor customer account activity to detect and prevent potential violations and conduct periodic inspections of the firm’s offices and other locations where business is conducted.    

Recovery of Investment Losses    

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.      

Free Consultation – National Securities Attorneys – the White Law Group         

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.            

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.             

With over 30 years of securities law experience, the White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses.             

If you have concerns regarding investments you purchased through Moors & Cabot Inc. and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.    

For more information on The White Law Group, visit whitesecuritieslaw.com.    


Tags: , , , , , , Last modified: February 22, 2024