MATT DALE MABERRY at B.B. GRAHAM & COMPANY, INC. – View Complaints, Disclosures, Scams and Audit Report (Updated 2023)

Disclosure #1 for MATT MABERRY

• • eventDate: 2/18/2016
  • Disclosure Type: Regulatory
  • Disclosure Resolution: Final
  • Disclosure Detail :: DocketNumberFDA: 2013035045902
  • DocketNumberAAO: 2013035045902
  • Initiated By: FINRA
  • Allegations: Without admitting or denying the findings, Maberry consented to the sanctions and to the entry of findings that he was his member firm’s CEO and CCO who was responsible for the design and implementation of the firm’s supervisory system and he failed to ensure that the firm implemented a supervisory system reasonably designed to supervise the sales activity of its registered representatives. The findings stated that in particular, the firm’s supervisory system was not reasonably designed to ensure that registered representatives made suitable recommendations of complex products such as leveraged, inverse, and inverse-leveraged exchange traded funds (together, on-Traditional ETFs) and leveraged, inverse, or inverse-leveraged mutual funds ( on-Traditional Mutual Funds). In general, the firm’s supervision of registered representative sales activity consisted only of a daily review of a trade blotter reflecting sales made by registered representatives on the previous day. The blotter did not contain details relating to the transacting-customer’s investment objective, risk tolerance, age, or other relevant suitability information. In addition, the firm failed to evidence that it conducted ongoing monitoring of customer accounts to detect problematic trends. The firm failed to use any exception reports or similar tools in connection with its supervision of registered representative sales activity. The firm also failed to reasonably supervise the sale of Non-Traditional ETFs and Non-Traditional Mutual Funds by its registered representatives. As a result of the daily reset that locks in the gains or losses of the previous trading day, and the accompanying compounding effect, in Regulatory Notice 09-31, FINRA cautioned that Non-Traditional ETFs are typically unsuitable for retail investors who plan to hold them longer than one trading session. Notwithstanding this guidance, the firm sold Non-Traditional ETFs (as well as Non-Traditional Mutual Funds, which are subject to similar risks) to its customers, many of whom held these products for far longer than one trading session. Although the firm sold Non-Traditional ETFs and Mutual Funds, it failed to conduct adequate due diligence on Non-Traditional ETFs and Non-Traditional Mutual Funds and failed to adequately train its registered representatives on the unique risks associated with these products. The firm also failed to adopt and implement adequate WSPs relating to these complex products, and further failed to implement any system to monitor Non-Traditional ETF and Mutual Fund holding periods, benchmark volatility, and losses. The findings also stated that as a producing broker, Maberry made unsuitable recommendations and sold to his customers of certain complex products. Maberry lacked a reasonable basis to recommend the products to his customers because he did not fully understand the risks associated with these securities. Maberry also recommended and executed unsuitable purchases of Class A shares of Non-Traditional Mutual Funds for customers’ accounts. Maberry’s recommendations of the Class A shares of Non-Traditional Mutual Funds were unsuitable, and resulted in losses of $38,445 for the customers who purchased the Class A shares.
  • Resolution: Acceptance, Waiver & Consent(AWC)
  • SanctionDetails :: Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
  • SanctionDetails :: Amount: $10,000.00 Sanctions: Restitution
  • SanctionDetails :: Amount: $38,445.00 Sanctions: Suspension
  • SanctionDetails :: Registration Capacities Affected: any capacity, including in any principal capacity
  • Duration: five months
  • Start Date: 3/21/2016
  • End Date: 8/20/2016
  • Sanctions: plus interest on the restitution
  • Regulator Statement: Fine paid in full on March 9, 2016.