Matthew Charles Woodard of Farmington Connecticut a stockbroker formerly registered with ProEquities Inc. has been fined $20,000.00 and barred by the Connecticut Department of Banking from transacting business in Connecticut as an investment advisor agent or broker-dealer agent according to a Consent Order containing findings that Woodard transacted business with a Connecticut investor while unregistered and had sold away from the firm. Case No. CO-17-8279-S (Mar. 23, 2018).
According to the Order, between September of 2013 and August of 2014, Woodard was responsible for servicing the customer’s brokerage account while at ProEquities, Inc. The Order stated that in 2014 and 2015, Woodard solicited the customer’s purchase of Toppikgink securities even though securities of Toppikgink were not registered in Connecticut nor allowed an exemption from registration. Evidently, the securities – labeled as Series A Preferred Debt – were offered by Woodard outside ProEquities’ auspices.
Apparently, the offering documents for the Toppikgink securities stated that funds accumulated from investors would be utilized for purposes of investing in private distressed debt opportunities; however, the funds received from the customer were not utilized for that purpose. Rather, a portion of the customer’s funds went towards paying personal expenses incurred by Woodard. The Order stated that between August of 2014 and June of 2015, while Woodard was associated with ProEquities, Inc., Woodard procured a $220,000.00 loan on Toppikgink’s behalf.
The Order further revealed that Woodard and a former ProEquities colleague, Walter J. Dubiel, eventually teamed up to move the customer’s accounts from ProEquities to Dubiel’s existing employer, First Allied Advisory Services, Inc. and First Allied Securities, Inc. The Order stated that the customer’s account was moved from ProEquities to First Allied, wherein Dubiel exercised discretion in the customer’s account.
Apparently, Woodard assisted Dubiel conduct securities business with the customer despite Woodard neither having been employed by First Allied nor having any authority with respect to transacting on the customer’s behalf. The Order revealed that in January of 2015, Woodard even gained unauthorized access to the customer’s account to liquidate the customer’s holdings without the customer’s knowledge. The Order stated that all together, the customer invested or loaned $325,000.00 to Woodard.
The Commissioner found that Woodard violated, inter alia: Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered securities to a Connecticut resident; 36b-4(a) of the Act by committing securities fraud; 36b-31-6e of the Regulations of Connecticut State Agencies by selling away from ProEquities; and 36b-31-15b(c) of the Regulations by entering into a borrowing arrangement while employed by ProEquities in violation of FINRA Rule 3240.
FINRA Public Disclosure reveals that Woodard has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon Woodard’s consent to findings that he failed to cooperate with FINRA’s investigation into accusations of him effecting transactions in a customer’s account who was deceased in violation of FINRA Rules 2010 and 8210. Letter of Acceptance Waiver and Consent No. 2015047964901 (Feb. 19, 2016).
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