Thaddeus Peter McGaffey, of Bloomfield Hills, Michigan, a stockbroker formerly registered with Waddell & Reed, has been assessed a monetary penalty of $2,111.68 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to a Decision containing findings that McGaffey failed to notify FINRA about the status of his compliance with a customer initiated investment related settlement arrangement or arbitration claim. Case No. 20160516277 (Mar. 16, 2017).
FINRA Public Disclosure confirms that on August 14, 2014, a customer filed an investment related written complaint involving McGaffey’s conduct, in which the customer requested $35,000.00 in damages founded on allegations that McGaffey borrowed funds from a customer in July of 2013 that were not repaid by McGaffey according to the terms of a promissory note arrangement.
Following the customer’s dispute, McGaffey was fined $5,000.00, ordered to pay $35,000.00 in restitution, and suspended for three months by FINRA for engaging in an unauthorized borrowing arrangement with the firm’s customer. Letter of Acceptance, Waiver and Consent, No. 2014042420801 (Sept. 24, 2015). According to the AWC, McGaffey never sought or retrieved his firm’s approval prior to borrowing customer EW’s funds. Notwithstanding, the arrangement would have been disallowed according to the firm’s policies. Moreover, McGaffey inaccurately confirmed to his firm through a compliance questionnaire that he had not borrowed from customers or was subject of any outstanding loan obligations. FINRA found that McGaffey’s conduct was violative of FINRA Rules 2010 and 3240.
Moreover, the State of Kentucky Department of Finance Institutions entered a Denial Order denying McGaffey’s investment advisor registration application based upon allegations of his unethical and dishonest business practices while serving in the capacity of broker-dealer agent; The Department found McGaffey’s conduct violative of 808 KAR 10:440 and 10:450. Department of Financial Institutions v. J-Thaddeus Peter McGaffey, Administrative Agency Action No. 2015-AH-00157 (Dec. 9, 2015). McGaffey’s investment advisor registration application was also denied by the State of Michigan for conduct violative of Section 412(1) of the Michigan Uniform Securities Act of 2002, MCL 451.2412(1). Case No. 328598 (Mar. 11, 2016).
McGaffey’s registration with Waddell & Reed was terminated as of August 26, 2014.
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