Matthew Meehan, a stockbroker formerly registered with E.J. Sterling, LLC, has been fined $15,000.00 and suspended for twelve months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he effected unsuitable trades in customer accounts. Letter of Acceptance, Waiver and Consent, No. 2016050114901 (Jan. 11, 2017).
According to the AWC, from January of 2014 to June of 2015, Meehan effected trades in a quantitatively unsuitable fashion in RK’s, SM’s, and PO’s investment accounts. FINRA stated that customer RK suffered from an annual cost/equity ratio of fifty-four percent, and annual turnover rate of twelve; SM suffered from an annual cost/equity ratio of one-hundred and ten percent, and annual turnover rate of twenty-one; and PO’s account contained a cost/equity ratio of one-hundred and seventy-nine percent, and annual turnover rate of thirty-two. FINRA found that Meehan failed to have any reasonable basis to conclude that the transactions he recommended were suitable for the customers. Consequently, his conduct was found by FINRA to be violative of FINRA Rules 2111 and 2010.
The AWC additionally stated that discretion had been exercised by Meehan in the customer accounts. However, in these cases, the customers never provided written authorization to Meehan to allow him to engage in the trading. Further, EJ Sterling reportedly never deemed the customers’ accounts to be approved for purposes of discretionary trading. FINRA found that Meehan’s discretionary trading activity in this regard was conduct violative of FINRA Rule 2010 and NASD Rule 2510.
FINRA Public Disclosure reveals that on November 30, 2015, a customer filed an investment related written complaint involving Meehan’s conduct, wherein the customer requested $15,148.00 in damages based upon allegations that the customer was pressured to purchase stock in Truecar Inc., which caused the customer to sustain significant investment losses.
Since December 22, 2000, Meehan has been associated with ten different broker dealers, seven of which has been expelled by securities regulators for violation of federal securities laws or is otherwise defunct. #cockroach
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