CHARLOTTE, NC – The Guiliano Law Group, P.C. has filed a Statement of Claim against Northwestern Mutual Investment Services LLC on behalf of investors before the Financial Industry Regulatory Authority or FINRA seeking damages for fraud, the breach of fiduciary duty, the failure to supervise, negligence and in violation of the federal securities laws and the North Carolina Uniform Securities Act, N.C.G.S. Chapter 78A-8, et seq. (2021) resulting from an investment scheme allegedly effected by its former registered representative, Matthew Thomas Cochran, and, its 6235 Morrison Boulevard.Charlotte, North Carolina office.
According to the Statement of Claim, Cochran obtained control of investor funds, and invested these funds in a variety of high risk Standard & Poors Exchange Traded Funds and options, resulting in the loss of the investors’ entire investment.
According to FINRA Public Disclosure, from November 14, 2011 through at least April 17, 2017, Cochran was a registered representative and the “Director of Growth and Development,” conducting business from a Northwestern branch office located at 6235 Morrison Boulevard in Charlotte, North Carolina.
On April 17, 2017, Cochran was “permitted to resign” from Northwestern, and was subsequently barred by FINRA for effecting outside securities accounts for 94 of his Northwestern customers, and effecting 5,931 transactions in these accounts, totaling more than $9.6 million, and resulting in millions of dollars in undisclosed losses for these customers. Department of Enforcement v. Matthew Thomas Cochran, No. 2017054247001 (March 20, 2018).
In April 2020, among other things, Northwestern was sanctioned and fined $350,000 by FINRA for the failure to have a reasonable supervisory system to review and monitor transfers of customer funds to third party accounts and outside entities between 2005 and 2017. Department of Enforcement v. Northwestern Mutual Investment Services LLC, No. 2017054642101 (April 12, 2020). Specifically, the “Firm’s supervisory system failed to include a policy or procedure to review and monitor for multiple transmittals of funds from multiple customers going to the same third party accounts.”
The Statement of Claim alleges that Northwestern also lied to regulators and breach its fiduciary duty to its customers, when upon learning of Cochran’s wrongful conduct, in an effort to insulate itself from liability, “permitted him to resign” and failed to notify his customers.
Courts and securities arbitration panels, in identical circumstances, have long held brokerage firms responsible for the conduct of their registered representatives in “selling away” cases based upon the broker-dealer’s failure to supervise.
Northwestern is responsible for Cochran’s conduct as its agent, and is also responsible for Cochran’s conduct under the common law doctrine of respondeat superior. Such liability extends to intentional torts committed within the scope of employment, even if the principal is unaware of such misconduct. Under common law principles, a principal is liable for the deceit of its agent committed in the very business he was appointed to carry out. This is true even though the latter’s specific conduct was carried on without knowledge of the principal.”
Investors suffering damages as the result of investing with Northwestern or Cochran should consult with counsel to determine their legal rights and obligations. Contact us for a free, confidential evaluation of your claim. Representation offered on a contingent fee basis.
The Guiliano Law Group, P.C.
Our practice is limited to the representation of investors. Over the last three decades, we have recovered more than a hundred million dollars for more than 1,000 injured investors from all over the United States and several foreign countries. We accept representation purely on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a confidential consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
For more information concerning common claims against stockbrokers and investment professionals, please visit us at securitiesarbitrations.com.
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If you believe that you have been the victim of brokerage fraud, contact us for a free consultation.
