Former BMA Broker Barred by FINRA Following Investigation into Purported Unsuitable Trading
On May 21, 2020, former BMA Securities, LLC (BMA) stockbroker Martin J. Noonan, Jr. (Noonan, CRD# 2982159) was barred by the Financial Industry Regulatory Authority (FINRA) from the securities industry. In connection with an investigation by FINRA Enforcement—and as set forth in a Letter of Acceptance, Waiver and Consent (AWC) under which Mr. Noonan neither admitted nor denied FINRA’s findings of fact—he consented to an industry bar in connection with allegations of “… unsuitable and excessive trading in a client account.”
As alleged in the AWC, “In May 2020, Noonan refused to respond to an information request issued pursuant to FINRA Rule 8210, thereby violating FINRA Rules 8210 and 2010.” Mr. Noonan’s career in the securities industry began in 1998, when he was affiliated with Equibond, Inc. (Equibond) and NBC Financial, Inc. Most recently, from 2013 until his separation from employment in April 2020, Noonan was employed as a registered representative with BMA, in the brokerage firm’s Rolling Hills Estates, CA branch office.
As of the date of this writing, FINRA BrokerCheck discloses that Mr. Noonan is the subject of a pending customer dispute seeking $250,000 in damages, concerning allegations of account mismanagement and “that the account representative engaged in unsuitable or excessive trading while at Equibond, Inc. (ending 12/2013) or BMA Securities, LLC (3/2014-8/2017).”
Excessive trading occurs where (1) a financial advisor exercises control over a customer’s account, and (2) the level of activity in that account is inconsistent with the customer’s investment objectives, financial situation, and needs. Excessive trading constitutes a violation of industry standards under FINRA Rule 2111 (Suitability). In determining whether trading is excessive, the use of certain factors and corresponding statistical formulas is commonplace, including analyzing an account’s turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account.
Furthermore, under applicable FINRA rules, brokerage firms like BMA and Equibond have an affirmative legal duty to supervise their employees and affiliated persons. Specifically, under FINRA Rule 3110 (NASD Rule 3010), firms like BMA and Equibond must “establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance” with applicable FINRA rules, in addition to state and federal securities laws. It is critical for broker-dealers to not only establish such a supervisory system, but to also maintain their supervision by periodically meeting with individual financial advisors to discuss, among other things, the products they are selling and their sales methods. Account activity including trading activity relative to a customer’s investment objectives, stated risk tolerance, and financial situation and needs should also be discussed.
The attorneys at Giarrusso Law Group LLC have significant experience in working closely with investors to resolve all manner of issues concerning investment losses, including losses suffered due to misconduct or negligence by a broker or 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 no-obligation consultation.