Giarrusso Law Group LLC continues its investigation into allegations of misconduct by former stockbroker Murray Todd Petersen (Petersen, CRD No. 1311730). Attorney Michael Giarrusso is interested in speaking with investors who purchased diamonds through Petersen pursuant to an outside business activity he was allegedly engaged in while affiliated with SCF Securities, Inc. (SCF) in that firm’s Roseville, CA branch office.

According to public disclosures through FINRA BrokerCheck, Petersen has been named or is otherwise involved in a total of eight customer complaints since 2020, with seven of these matters having resulted in an aggregate settlement amount of $631,730. These customer complaints concerning Petersen—who was previously employed by SCF as a financial advisor from November 2015 until his termination from employment in October 2019—generally allege that Petersen engaged in “fraud and breach of fiduciary duty related to the purchase of diamonds . . . via an outside business activity.”

Pursuant to FINRA Rule 3110 (NASD Rule 3010), brokerage firms like SCF must “establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules.” It is critical for broker-dealers like SCF to not only establish such a supervisory system, but furthermore to properly exercise and maintain their supervision by, among other things, periodically meeting with individual financial advisors to discuss the products they are selling and their sales methods, as well as to examine correspondence with customers.

A broker-dealer’s duty to supervise includes a duty to perform certain activities that would potentially detect undisclosed outside business activities of firm representatives. See McGraw v. Wachovia Sec., LLC, 756 F. Supp. 2d 1053, 1074 (N.D. Iowa 2009). In instances where a customer suffers losses due to a financial advisor’s misconduct—including engaging in selling investment products, or other valuables such as diamonds, away from their firm by conducting business outside of their firm—then the broker-dealer employing that advisor may be held liable for its failure to adequately supervise the employee.

Investors who have suffered losses with Todd Petersen, or another financial advisor, may contact our office by telephone at (201) 771-1115 or by email at info@gialawgroup.com for a free, confidential consultation to learn more about their legal rights. The attorneys at Giarrusso Law Group LLC have extensive experience with handling all manner of claims on behalf of investors who have been victimized by securities fraud or related misconduct.