Patrick Joseph Donohue – and the firm that employs him or her – is regulated by the Financial Industry Regulatory Authority (FINRA).
If you are like most people, before you go out to dinner at a new restaurant, you probably take a quick look at the reviews. This makes sense; you are going to pay for an expensive dinner, and you need to be sure that you are getting a good value.
Yet, when choosing a financial advisor, many people fail to conduct this same level of due diligence. Before turning over access to your money, you need to be sure that you have found a financial advisor that you can trust. Here, our audit report, including details of allegations, complaints, and sanctions will help you decide whether or not to invest with Patrick Joseph Donohue.
BrokerComplaints.com is currently investigating allegations related to Patrick Joseph Donohue. We provide a free platform for investors to help them in their claims against negligent brokers and brokerage firms.
About Patrick Donohue
Patrick Joseph Donohue is an Investment Adviser. Patrick Joseph Donohue’s Central Registration Depository (CRD) number is 4439545 and the FINRA Profile can be found at – https://brokercheck.finra.org/individual/summary/4439545.
Click here to download a Detailed Audit Report for Patrick Joseph Donohue.
Patrick Joseph Donohue has previously been reprimanded and has disclosures and/or client dispute(s) listed at FINRA BrokerCheck.
Accusations and Disclosures
You can find below, a quick snapshot of Patrick Joseph Donohue’s regulatory actions, arbitrations, and complaints.
DISCLOSURE 1 –
- Event Date: 11/19/2013
- Disclosure Type: Regulatory
- Disclosure Resolution: Final
- Disclosure Detail :: DocketNumberFDA: 2012033272801
- DocketNumberAAO: 2012033272801
- Initiated By: FINRA
- Allegations: FINRA RULES 2010, 2150(A), 3270, NASD RULES 2110, 3030, CAUSED HIS MEMBER FIRM TO VIOLATE FINRA RULE 4511 AND NASD RULE 3110 – PATRICK DONAHUE ENGAGED IN AN UNDISCLOSED OUTSIDE BUSINESS ACTIVITY BY PROVIDING TAX PREPARATION ASSISTANCE AND VARIOUS OTHER SERVICES TO CUSTOMER ACCOUNTS AND RECEIVED APPROXIMATELY $57,897 IN PAYMENTS. DONAHUE DID NOT PROVIDE HIS MEMBER FIRM WITH WRITTEN NOTICE OF THIS ACTIVITY AND DID NOT OBTAIN THE FIRM’S APPROVAL TO ENGAGE IN THE ACTIVITY. DONAHUE’S FIRM’S WRITTEN SUPERVISORY POLICIES AND PROCEDURES PROHIBITED FIRM EMPLOYEES FROM ENGAGING IN OUTSIDE BUSINESS ACTIVITIES WITHOUT SUBMITTING A WRITTEN REQUEST AND OBTAINING FIRM APPROVAL PRIOR TO ENGAGING IN THOSE ACTIVITIES. DONAHUE ASSISTED A TRUST WITH PREPARING A FINANCIAL AUDIT FOR WHICH HE ANTICIPATED RECEIVING $4,200. DONAHUE DRAFTED AND SIGNED A CHECK FOR $4,200 FROM THE TRUST ACCOUNT PAYABLE TO HIMSELF ALTHOUGH HE WAS NEITHER AN AUTHORIZED SIGNER NOR A FIDUCIARY FOR THE ACCOUNT AND WAS NOT AUTHORIZED TO SIGN A CHECK FROM THE ACCOUNT. A RECENTLY DECEASED INDIVIDUAL WAS THE ONLY AUTHORIZED SIGNER FOR THE TRUST ACCOUNT AND DONAHUE WAS NOT APPOINTED AS SUCCESSOR TRUSTEE AND DIDN’T OBTAIN CHECK-WRITING AUTHORITY UNTIL LATER. DONAHUE DRAFTED AND SIGNED AN ADDITIONAL $4,200 CHECK FROM THE TRUST ACCOUNT PAYABLE TO HIMSELF TO WHICH HE WAS NOT ENTITLED BECAUSE HE HAD PREVIOUSLY OBTAINED THE $4,200 BY THE EARLIER CHECK. DONAHUE COMPLETED A FIRM QUESTIONNAIRE AND FALSELY INDICATED HE DID NOT ENGAGE IN ANY OUTSIDE BUSINESS ACTIVITIES. HE STATED THAT HE WAS NOT NAMED AS A BENEFICIARY ON A NON-FAMILY MEMBER ACCOUNT ALTHOUGH HE WAS AWARE AN INDIVIDUAL HAD DESIGNATED HIM AS A BENEFICIARY OF HIS ESTATE THAT MAINTAINED A TRUST ACCOUNT WITH THE FIRM. THE FIRM’S WRITTEN POLICIES AND PROCEDURES REQUIRED EMPLOYEES TO IMMEDIATELY NOTIFY A SUPERVISING MANAGER IF THEY LEARNED THEY HAD BECOME THE BENEFICIARY OF A CUSTOMER’S ESTATE. DONAHUE DID NOT FOLLOW THESE PROCEDURES. ON A FIRM QUESTIONNAIRE, DONAHUE DENIED HE WAS COMPENSATED OUTSIDE OF FIRM PAYROLL ALTHOUGH HE HAD KNOWINGLY ACCEPTED COMPENSATION FROM A FIRM REGISTERED SALESPERSON FOR WHOM HE HAD WORKED AS A SALES ASSISTANT. THE FIRM REQUIRED THAT ALL FINANCIAL ADVISORS PAY BONUSES TO SALES ASSISTANTS THROUGH THE FIRM’S ONLINE PAYROLL SYSTEM. THE INDIVIDUAL AND DONAHUE DELIBERATELY SOUGHT TO CONCEAL THESE PAYMENTS FROM THE FIRM BY ROUTING THE PAYMENTS THROUGH A CHECKING ACCOUNT HELD BY THE INDIVIDUAL’S WIFE AWAY FROM THE FIRM. DONAHUE RECEIVED A TOTAL OF $18,001 THROUGH THE WIFE’S CHECKING ACCOUNT. IN THE QUESTIONNAIRE, DONAHUE ALSO FALSELY DENIED HE ENGAGED IN ANY OUTSIDE BUSINESS, SERVED AS A BENEFICIARY ON A NON-FAMILY MEMBER ACCOUNT, SERVED IN A FIDUCIARY CAPACITY ON ANY ACCOUNTS, AND ACCEPTED CHECKS AND/OR SECURITIES FROM CLIENTS WITHIN THE PAST YEAR. IN COMPLIANCE QUESTIONNAIRES FOR THE FOLLOWING FOUR YEARS, DONAHUE FALSELY DENIED HE RECEIVED COMPENSATION FROM FINANCIAL ADVISORS OUTSIDE OF FIRM PAYROLL SYSTEMS; ENGAGED IN ANY OUTSIDE BUSINESS ACTIVITIES; WAS NAMED AS A BENEFICIARY ON A NON-FAMILY MEMBER ACCOUNT; AND ACTED IN A FIDUCIARY CAPACITY FOR CUSTOMER ACCOUNTS. IN ONE QUESTIONNAIRE, DONAHUE FALSELY DENIED RECEIVING ANY CHECKS OR SECURITIES FROM CLIENTS WITHIN THE PAST 12 MONTHS ALTHOUGH HE HAD RECEIVED A CHECK FROM THE TRUST. IN TWO QUESTIONNAIRES, DONAHUE DENIED RECEIVING ANY GIFTS FROM CLIENTS WORTH OVER $100 WITHIN THE PAST 12 MONTHS ALTHOUGH HE ACCEPTED CASH AND STOCK GIFTS FROM AN INDIVIDUAL CONTRARY TO FIRM POLICY. DONAHUE WORKED WITH THE INDIVIDUAL TO CIRCUMVENT THIS POLICY BY ARRANGING FOR THE TRANSFER OF SHARES OF STOCK TO DONAHUE VIA THIRD PARTY. IN THREE QUESTIONNAIRES, DONAHUE INDICATED HE HAD NOT PROVIDED ANY FALSE INFORMATION IN THE QUESTIONNAIRES FOR THOSE YEARS WHICH WAS INACCURATE. A FRAUDSTER IMPERSONATED A FIRM CUSTOMER AND HACKED INTO THE CUSTOMER’S EMAIL ACCOUNT. [CONTINUED IN COMMENT.
- Resolution: Acceptance, Waiver & Consent(AWC)
- Sanction Details :: Sanctions: Bar (Permanent)
- Sanction Details :: Registration Capacities Affected: All Capacities
- Duration: Indefinite
- Start Date: 11/19/2013
- Regulator Statement: ALLEGATIONS CONTINUED: DONAHUE RECEIVED EMAILS FROM THE EMAIL ADDRESS ON FILE FOR THE CUSTOMER WHO WAS A SIGNATORY ON A FIRM ACCOUNT FOR AN ENTITY. THE EMAILS CONTAINED INSTRUCTIONS FOR WIRE TRANSFERS TO BE MADE FIRM THE ENTITY’S ACCOUNT TO THIRD PARTY DESTINATIONS. DONAHUE COMPLETED VERBAL WIRE PROCESSING FORMS IN WHICH HE FALSELY INDICATED HE SPOKE TO THE CUSTOMER REGARDING THE WIRE REQUESTS CONTRARY TO FIRM POLICY THAT REQUIRED EMPLOYEES TO HAVE DIRECT VERBAL COMMUNICATION WITH CUSTOMERS PRIOR TO EFFECTING WIRE TRANSFERS. AFTER DONAHUE SUBMITTED THE FORMS TO THE FIRM, WIRE TRANSFERS TOTALING $63,000 WERE EFFECTED. SUBSEQUENTLY, IT WAS DISCOVERED THAT THE CUSTOMER HAD NOT AUTHORIZED THE TRANSFERS AND THE FIRM REIMBURSED THE ENTITY FOR ITS LOSSES. BY FALSIFYING FIRM DOCUMENTS, DONAHUE CAUSED THE FIRM TO MAINTAIN INACCURATE BOOKS AND RECORDS. WITHOUT ADMITTING OR DENYING THE FINDINGS, DONAHUE CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS; THEREFORE, HE IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY.
DISCLOSURE 2 –
- Event Date: 6/26/1987
- Disclosure Type: Criminal
- Disclosure Resolution: Final Disposition
- Disclosure Detail :: Criminal Charges :: Charges: 1 COUNT PC488, PETTY THEFT, MISDEMEANOR, GUILTY
- Charge Type: MISDEMEANOR
- Disposition: CONVICTED, 10/8/87, PLACED ON DIVERSION FOR 6 MONTHS, TERMINATING 4/8/88, PAID $100. FEE & 30 HOURS COMMUNITY SEVICE.RESTITUTION IN THE AMOUNT OF $19.65 PAID ON 10/8/87.
- Broker Comment: AGREED TO SHARE A CAB FROM SAN FRANCISCO TO SAUSALITO. UPON ARRIVAL THE OTHER PARTY SAID I WS RESPONSIBLE FOR ENTIRE FARE WHICH I REFUSED TO PAY AND WAS SUBSEQUENTLY ARRESTED.
According to a study prepared for the FINRA Investor Education Foundation, 80 percent of American investors report that they have been solicited to participate in a fraud scheme, while 11 percent of American investors report that they personally lost money as a result of fraud.
FINRA notes that the rate of investment fraud is most likely much higher than it is reported. This is because many victims of financial advisor scams are too ashamed to come forward. Further, the study also found that a significant number of investors do not know how to spot common red flags of investment fraud. The least you should do is share your experience with other potential victims of investment scams.
Under federal securities law and securities industry regulations, registered investment firms have a legal duty to supervise their financial advisors. Section 15(b)(4)(E) of the Securities and Exchange Act of 1934 makes a securities firm liable for the conduct of representatives.
- MORGAN STANLEY SMITH BARNEY (CRD#: 149777) :: 6/1/2009 – 7/13/2012 :: SAN FRANCISCO, CA
- MORGAN STANLEY & CO. INCORPORATED (CRD#: 8209) :: 4/2/2007 – 6/1/2009 :: SAN FRANCISCO, CA
- MORGAN STANLEY DW INC. (CRD#: 7556) :: 11/14/2002 – 4/2/2007 :: SAN FRANCISCO, CA
The duty to supervise securities representatives is a strong legal requirement. Registered investment firms must take many different steps to ensure that they are protecting their customers from irresponsible and criminal financial advisors.
Legit or Not?
Unfortunately, stockbroker fraud is more common than many investors would like to think. And yes, stockbrokers (including Patrick Joseph Donohue, but not limited to) can (and do) steal money from their clients. While it’s rare that a broker will literally steal his client’s money (though that does happen), typically the “theft” of investment funds comes in the form of other fraudulent violations of securities law and FINRA rules which leads to significant investment losses.
Investors generally understand that there are risks associated with buying and selling securities. The market can go up, and the market can go down. No matter how skilled of an investor you are, there are always risks. With that being said, sometimes investment losses cannot be blamed on simple back luck.
There are 10 major types of complaints we receive against Investment Brokers –
- Outright Theft (Conversion of Funds)
- Unauthorized Trading
- Misrepresentation or Omission of Material Facts
- Excessive Trading (Churning)
- Lack of Diversification
- Unsuitable Investment Recommendations
- Failure to Disclose a Personal Conflict of Interest
- Front Running of Transactions
- Breakpoint Sale Violations
- Negligent Portfolio Management
Do your due diligence before investing. Public records are available for everybody to review and decide on the safest bet.
How to Protect Yourself
We, as citizens, place a great deal of trust in the financial advisors who are tasked with helping us achieve and maintain financial security. Most of the time financial advisors and stockbrokers are honest folks who work diligently in their client’s best interests. However, on occasion financial advisors and the brokerage firms who employ them mess up and cause serious financial harm to their clients. Sometimes these losses are caused by simple negligence. Other times fraud or other serious misconduct is to blame.
Here are 5 signs that your broker needs to be reported –
- Breach of Fiduciary Duty: Under the Investment Advisers Act of 1940, certain investment professionals, known as registered investment advisors (RIAs), owe fiduciary obligations to their customers. Your investment broker must always look out for your best interests. If you lost money because of your broker’s breach of fiduciary duty, you may be entitled to compensation for the full value of your damages.
- Unsuitable Investments: Many financial advisors are not fiduciaries. Instead, they are held to the suitability standard. These stockbrokers and financial advisors can only sell and recommend financial products that are appropriate for a customer’s unique investment profile. If you lost money in unsuitable investments, you should consider reporting them.
- Material Misrepresentations or Omissions: Brokers have a duty to make fair and honest representations to their clients. If they fail to do so, and an investor loses money due to a misrepresentation or a material omission, the broker may be liable for the investor’s losses.
- Lack of Diversification: Brokers must also act with the appropriate level of professional skill. Pushing a customer into over-concentrated investments is highly risky. Brokers can be held liable for losses sustained because of an investor’s inappropriate lack of diversification.
- Excessive Trading (Churning): Stockbrokers and financial advisors must have a well-grounded, reasonable basis to execute all trades. Unfortunately, there are cases in which brokers will frequently trade on a customer’s account, simply to increase their own fees. This unlawful practice is known as churning.
- Unauthorized Trading: Brokers must have the proper legal authority to make transactions on behalf of a client. If you lost money because your broker made trades that you never approved of, you may have been the victim of unauthorized trading. You should consult with an experienced attorney.
Report Patrick Donohue
In order to prevail in an investment fraud lawsuit or FINRA arbitration cases, you must be able to assert a viable ‘cause of action’.
Patrick Joseph Donohue – and the firm that employs this broker – is regulated by the Financial Industry Regulatory Authority (FINRA). FINRA provides an online form to allow investors to file a formal complaint against their financial advisor, stockbroker, or brokerage firm.
Click here to go to FINRA’s Online Complaint Form →
This form will ask you for specific information related to your complaint. Be prepared by gathering the following:
- Name and symbol for the investment product in question.
- The CRD number (4439545) for the broker – Patrick Joseph Donohue
- Your complete contact information.
Remember, it is advised to report your broker to FINRA, only after you have exhausted all of your other remedies and carefully prepared a compelling complaint. Once you file a complaint against your broker at FINRA, your case will be bound by FINRA’s rules and the arbitration panel’s eventual decision. The time clock will start, and your complaint will be served on your broker or broker-dealer.
The views and opinions expressed in these articles are those of the source BrokerComplaints.com and do not necessarily reflect the official position of ‘The Skeptic Files,’ which shall not be held liable for any inaccuracies presented. The information provided within this article is for general informational purposes only. While we try to keep the information up-to-date and correct, there are no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability or availability of the information in this article for any purpose.
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