Former LPL Advisor, Matthew Clason, Pleads Guilty to Wire Fraud in Connecticut District Court
On May 12, 2021, former financial advisor, Matthew O. Clason (Clason, CRD# 4692266), of Cheshire, CT, pled guilty in the District of Connecticut federal court to one count of wire fraud. The underlying criminal indictment concerned allegations that Mr. Clason—who was affiliated with LPL Financial LLC (LPL) from 2016 until his termination of employment in August 2020—transferred more than $668,000 from an elderly customer’s investment account into a bank account held jointly between the victimized customer and Mr. Clason.
As alleged by the authorities prosecuting this matter, beginning around 2015 Mr. Clason rendered certain investment-related services to a 73-year-old Connecticut securities customer. As alleged, this elderly investor maintained five securities accounts with Clason, and in January 2018, opened a joint bank account with Mr. Clason. From 2018 until August 2020, it has been alleged that Mr. Clason improperly transferred more than $668,000 from this customer’s securities accounts into the joint bank account. Subsequently, Mr. Clason allegedly misappropriated more than $620,000 from the joint bank account for his own personal use.
In September 2020, the SEC filed an emergency action seeking to freeze Mr. Clason’s assets. And later that same month, the Financial Industry Regulatory Authority (FINRA) barred Mr. Clason for his failure to provide certain documents and information as requested by FINRA Enforcement.
Mr. Clason was a seasoned financial advisor, having begun his career in the securities industry in 2004. After working for Lincoln Financial Advisors from 2007-2016, Mr. Clason became affiliated with LPL in October 2016, working in Glastonbury, CT. As disclosed through FINRA BrokerCheck, Mr. Clason has been named in two recent securities arbitration proceedings, each of which concluded in a settlement. Most recently, Mr. Clason was named in an arbitration concerning allegations that he “converted monies from Claimant at some point during the 2015-2020 time period.” This matter alleged damages of $2.5 million and resulted in a settlement of $1 million.
Pursuant to applicable securities laws and FINRA rules, brokerage firms including LPL have a legal obligation to supervise their employees and affiliated registered representatives. Under FINRA Rule 3110 (formerly NASD Rule 3010), brokerage firms must establish and maintain systems to supervise the activities of each associated person. It is also critical that the firms properly maintain their supervision by, among other things, periodically meeting with individual financial advisors to discuss products sold and sales methods, as well as to examine correspondence with customers. In instances where a customer suffers losses due to misappropriation of client funds and other inappropriate or illegal behavior by their financial advisor, the brokerage firm may be held liable for failure to adequately supervise its employee.
The attorneys at Giarrusso Law Group LLC have significant experience working with investors who have suffered investment losses, including losses related to the misconduct or wrongdoing of a financial advisor. Investors may pursue a claim to recover monies through securities arbitration before FINRA, or in some instances, through litigation. Investors who wish to discuss a possible claim may contact us by telephone at (201) 771-1115 or by email at info@gialawgroup.com for a no-cost, no-obligation, confidential consultation.