Matthew Thomas Cochran of Charlotte North Carolina a stockbroker formerly registered with Northwestern Mutual Investment Services LLC has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he established accounts from customers away from Northwestern Mutual without procuring the firm’s authorization. Letter of Acceptance Waiver and Consent No. 2017054247001 (Mar. 20, 2018).
According to the AWC, from November of 2015 to April 2, 2017, ninety-eight customers of Northwestern Mutual had been advised by Cochran to establish a total of ninety-four accounts at a broker-dealer that was not affiliated with Northwestern Mutual which offered investors the ability to place trades utilizing the firm’s online trading systems. The customers reportedly provided Cochran with verbal authorization to effect transactions on a discretionary basis in the accounts held away from Northwestern Mutual.
Evidently, Cochran facilitated the establishment of customers’ outside brokerage accounts, where he aided customers in setting up online access to the trading platform and utilized a third party (who held no securities licenses and was not registered with any firm) to effect customers’ transactions. Cochran reportedly failed to notify the outside brokerage firm about his association with Northwestern Mutual and failed to apprise Northwestern Mutual that he obtained discretionary trading authority over customers’ outside accounts.
The AWC revealed that securities transactions were then effected by Cochran and a third party in the customers’ outside brokerage accounts despite failing to generate written consent from customers to exercise discretion in their accounts. Cochran also reportedly failed to be forthcoming in the completion of Northwestern’s compliance questionnaire that was administered to him in August of 2016, where he indicated that he had not effected trades on a discretionary basis in customers’ accounts held at the firm or outside the firm’s auspices.
Evidently, Cochran and the third party placed about five thousand nine hundred thirty-one trades in customer accounts, where purchases and sales totaled approximately $9,600,000.00. Cochran was reportedly compensated a total of $34,000.00 in return for his activities in the customers’ accounts. FINRA found that Cochran’s conduct was violative of FINRA Rule 2010 and National Association of Securities Dealers (NASD) Rule 3050.
Moreover, the AWC stated that Cochran impersonated ten investors while speaking with the outside brokerage firm to effect transactions in customers’ accounts. In two customers’ cases, Cochran reportedly impersonated them to liquidate their securities holdings. FINRA found that Cochran’s conduct was violative of FINRA Rule 2010.
Cochran’s registration with Northwestern Mutual Investment Services, LLC was terminated on May 11, 2017.
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