George Craig Merhoff Jr. of Klamath Falls Oregon a stockbroker formerly employed by Cetera Advisors LLC has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded on findings that Merhoff failed to cooperate with a FINRA investigation into accusations of (1) Merhoff disseminating consolidated reports to customers and (2) Merhoff making payments to the firm’s customers without Cetera Advisors LLC’s knowledge. Letter of Acceptance, Waiver and Consent No. 2018057331001 (June 14, 2019).
According to the AWC, an investigation into Merhoff had been initiated by FINRA around the time that Merhoff was terminated from Cetera Advisors LLC. Specifically, the AWC revealed that FINRA was notified by Cetera Advisors LLC that Merhoff had been discharged based on allegations that the firm’s procedures and policies were violated by Merhoff in relation to certain payments being made to customers outside of the firm’s auspices.
The AWC reported that on April 19, 2019, a letter had been sent to Merhoff from FINRA personnel which called upon Merhoff to provide information and documentation to the regulator according to Rule 8210. Evidently, Merhoff was instructed by FINRA to provide a response no later than May 3, 2019; however, counsel for Merhoff obtained a one-week extension. Despite this extension, Merhoff still neglected to furnish a response. Rather, counsel for Merhoff reportedly notified FINRA that Merhoff would not be disclosing any information or documentation going forward. FINRA found that Merhoff’s refusal to cooperate was violative of FINRA Rules 2010 and 8210.
This is not the first time that Merhoff has been subject of a disciplinary action by a securities regulator. Specifically, Merhoff was issued an Order by Oregon Department of Consumer and Business Services Division of Financial Regulation where he was fined $70,000.00 and required to cease and desist from engaging in future violation of Oregon securities laws or rules based in part on accusations that an unsuitable energy-sector securities trading strategy had been implemented by Merhoff in the customer’s account, causing the customer’s investment account to be overconcentrated in speculative investments; Merhoff made unsuitable investment recommendations (conduct violative of OAR 441-205-0140); and Cetera Advisors LLC failed to supervise Merhoff’s activities (conduct violative of OAR 441-205-021093)(b). Case No. S-17-0007 (Aug. 10, 2017).
FINRA Public Disclosure confirms that Merhoff has been referenced in thirty-one customer initiated investment related disputes that concern allegations of his misconduct while he was registered with securities broker dealers including Cetera Advisors LLC. Particularly, a customer initiated investment related arbitration claim concerning Merhoff’s activities was resolved for $20,000.00 in damages founded on accusations of transactions being executed in violation of Oregon securities laws; the customer’s brokerage account having been negligently handled; and fiduciary duties owed to the customer being violated. FINRA Arbitration No. 16-00804 (June 27, 2017).
Then, a customer initiated investment related arbitration claim involving Merhoff’s conduct was settled for $155,000.00 in damages supported by allegations of conduct violative of securities laws in the state of Oregon; breach of contract; breach of fiduciary duty; and negligence in relation to the equities trades placed in the customer’s account. FINRA Arbitration No. 17-01508 (Sept. 20, 2018). Thereafter, a customer filed an investment related arbitration claim involving Merhoff’s activities where the customer sought $303,635.00 in damages based upon accusations that contractual and fiduciary duties owed to the customer had been breached; the customer’s investment account was negligently handled; trades had been entered in violation of NASD and FINRA Rules; bad investment recommendations were made to the customer; and Merhoff’s conduct ran afoul of Oregon securities laws. FINRA Arbitration No. 19-00380 (Feb. 11, 2019).
On June 5, 2019, another customer filed an investment related complaint concerning Merhoff’s conduct in which the customer requested unspecified damages (approximately twenty percent of the customer’s investment portfolio) based upon allegations of unwarranted performance; breach of contract; suitability; violation of FINRA Rules and securities laws; breach of fiduciary duty; negligence; and fraud in regard to the equities held in the customer’s investment account.
