According to publicly available information, Connecticut financial advisor Matthew O. Clason (CRD# 4692266) was barred effective September 17, 2020 from associating with any FINRA-member broker-dealers or other affiliated persons. The industry bar by FINRA Enforcement follows the filing of an emergency action by the SEC in federal court in Connecticut on September 1, 2020. Specifically, the SEC has civilly charged Mr. Clason with purportedly stealing approximately $330,000 from a retired 73-year old client. Further, he is accused of selling securities managed on the client’s behalf, transferring the proceeds to a joint bank account held in both of their names, and subsequently making numerous cash withdrawals.

Mr. Clason worked in the financial services industry for more than 15 years, having begun his career in 2004 as an investment company products/variable contracts representative at American General Securities Incorporated. Since 2007, Mr. Clason has been a dually registered broker and investment adviser. Beginning in October 2016, Mr. Clason was affiliated with LPL Financial LLC as a broker and with Integrated Wealth Concepts, LLC as a financial planner and SEC-registered adviser, in Glastonbury, Connecticut. In August 2020, Mr. Clason was terminated from his positions in connection with allegations that he “engaged in liquidations of securities in customer’s Firm account, transferred funds to [a] joint bank account, and withdrew funds.”

Concerning the allegations of misconduct by Mr. Clason, FIRNA Enforcement commenced an investigation in August 2020. During the investigation, Mr. Clason purportedly failed to provide FINRA-requested documents and information, in violation of FINRA Rules 8210 and 2010. Through a Letter of Acceptance, Waiver and Consent, Mr. Clason consented to an industry bar effective September 17, 2020, without admitting or denying any wrongdoing.

As alleged in the SEC’s Complaint, Mr. Clason provided investment services to a certain client for approximately five years. Due to the client’s limited mobility and other health conditions, Mr. Clason and his customer established a joint checking account in 2018 for the purpose of managing the client’s monthly expenses. Instead, Mr. Clason is alleged to have “exploited a personal relationship with and breached his fiduciary duty to the client to perpetrate his fraud and misappropriate hundreds of thousands of dollars.” He is reported to have made 45 transfers out of the client’s advisory account, mostly funded by the sale of securities, and to have deposited the proceeds in the joint bank account from which he later made numerous cash withdrawals from different bank branches, breaching his fiduciary duties and violating the Investment Advisers Act of 1940. Because Mr. Clason remained a joint signatory on the account and was believed to have client monies in his home at the time of the lawsuit’s filing, the SEC requested that the court enter an order freezing Mr. Clason’s assets and requiring an accounting. The SEC also sought permanent injunctive relief, disgorgement plus prejudgment interest, and civil penalties.

Under applicable FINRA rules, brokerage firms such as LPL have a legal obligation to supervise their employees and affiliated persons. Pursuant to FINRA Rule 3110 (formerly NASD Rule 3010), firms like LPL must establish and maintain robust systems to supervise the activities of each associated person. In instances where a customer suffers losses due to misappropriation of client funds or other misconduct, the firm may well be held liable for any 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 and confidential consultation.