The White Law Group Reviews New FINRA Sanctions and Investor Complaints Against Moors & Cabot Inc.
The White Law Group is reviewing complaints involving Moors & Cabot Inc. According to the regulator, there is a new FINRA sanction against Moors & Cabot Inc. for anti-money laundering compliance failures, here’s what’s on the firm’s record and what investors’ options may be.
Moors & Cabot Inc. (CRD# 594 / SEC# 801-48726, 8-23060) is a dual-registered broker-dealer and investment adviser headquartered in Boston, Massachusetts. If you have concerns about investments you purchased through Moors & Cabot, contact our FINRA arbitration attorneys today for a free consultation.
New FINRA Sanction: Anti-Money Laundering and Form CRS Failures
FINRA has reportedly censured and fined Moors & Cabot $125,000 in a new Letter of Acceptance, Waiver and Consent. FINRA found that from at least January 2020 to May 2024, the firm allegedly failed to develop and implement an anti-money laundering compliance program reasonably designed to detect and report suspicious transactions, including suspicious money movements, in violation of FINRA Rules 3310(a), 3310(f)(ii), and 2010.
FINRA also found that between June 2020 and March 2023, Moors & Cabot allegedly failed to deliver Form CRS to 3,264 retail investors and lacked a supervisory system reasonably designed to ensure Form CRS delivery. FINRA found the firm willfully violated Section 17(a)(1) of the Securities Exchange Act of 1934 and Exchange Act Rule 17a-14, along with FINRA Rules 3110 and 2010. The firm consented to the sanctions without admitting or denying the findings.
2023 SEC Action Over Undisclosed Revenue Sharing
In January 2023, the SEC charged Moors & Cabot with breaching its fiduciary duty to advisory clients by failing to fully and fairly disclose revenue sharing and incentive payments it allegedly received from its clearing brokers between February 2017 and September 2021. The SEC found this compensation, tied to cash sweep balances and margin loans, created conflicts of interest the firm did not adequately disclose.
Without admitting or denying the findings, Moors & Cabot agreed to a cease-and-desist order, a censure, and payment of $1,436,182 in disgorgement, $88,274 in prejudgment interest, and a $375,000 civil penalty.
Prior FINRA Sanctions
In June 2020, FINRA censured and fined Moors & Cabot $250,000 after finding the firm allegedly failed to disclose roughly $7.5 million in compensation earned on principal trades in preferred securities, where the firm bought shares from one customer and sold them to another, often within minutes, without disclosing its markup in writing.
In 2018, Massachusetts securities regulators included Moors & Cabot in a sweep of broker-dealers selling high-risk private placements to seniors, after a Wall Street Journal report on firms with elevated numbers of disciplinary events selling billions in private placements.
Moors & Cabot Broker Misconduct and Customer Complaints
Firms have a duty to supervise their registered representatives, and can be held liable for investor losses when they fail to detect or stop misconduct. Several brokers registered with Moors & Cabot have faced FINRA action in recent years.
FINRA has suspended broker Damian Baird (CRD#: 3097243) following allegations of misconduct.
FINRA also barred Robert Todd Clark (CRD#: 810261) in 2018 after allegations he withdrew funds without authorization from an account for which he served as trustee. Clark was registered with Moors & Cabot in Boston from May 2013 until his 2018 termination.
FINRA barred Scott Sibley (CRD#: 1523981) in 2017 after finding he allegedly executed roughly 900 unauthorized transactions across two accounts belonging to one customer, including uncovered put option trades, and caused the customer to carry an unauthorized margin debit balance. Sibley reportedly has 23 disclosures on his BrokerCheck record.
Recovering Investment Losses
Investors who lost money due to Moors & Cabot’s alleged supervisory failures may be able to recover damages through FINRA arbitration. The White Law Group’s attorneys can evaluate your claim, help determine whether you have a case, and represent you throughout the arbitration process.
Contact The White Law Group
The White Law Group is a national securities fraud attorneys with offices in Chicago and Seattle. Since 2010, the firm has handled over 800 FINRA arbitration cases. If you have concerns about investments you purchased through Moors & Cabot, call (888) 637-5510 for a free consultation, or contact us online.
Frequently Asked Questions
1. How do I file a claim to recover losses from Moors & Cabot?
Most brokerage account agreements typically include a pre-dispute arbitration clause, so claims like this are generally filed and resolved through FINRA arbitration rather than in court. Arbitration can still result in a monetary recovery, and our attorneys can help you evaluate whether you have a claim.
2. What does it mean that Moors & Cabot allegedly failed to detect suspicious transactions?
An anti-money laundering program is meant to flag unusual account activity, including suspicious money movements, before it harms customers. A firm’s failure to implement one can leave fraud or unauthorized transfers undetected for years, which matters if your account activity was ever affected.
3. Can Moors & Cabot be held responsible for a broker’s misconduct even if the firm didn’t know about it?
Yes, potentially. Firms have a duty to supervise their brokers, and a firm that fails to catch red flags, like unauthorized trading or undisclosed conflicts, can be held liable for failing to supervise even without direct knowledge of the misconduct.
