LPL Financial Stockbroker Barred In Theft Investigation
Matthew O. Clason of Glastonbury Connecticut a stockbroker formerly registered with LPL Financial LLC has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity founded upon findings that he did not honor FINRA requests which had been made during the time that he was under investigation for violating FINRA rules. Letter of Acceptance Waiver and Consent No. 2020067686301 (Sept. 17, 2020).
FINRA Public Disclosure reveals that on September 11, 2020, a Uniform Termination Notice for Securities Industry Registration (known as a Form U5) had been submitted to FINRA which alerted investigators to Clason’s termination. The AWC stated that Clason was terminated from LPL Financial supported by accusations of his joint ownership of an account with a customer of the securities broker dealer. LPL Financial also cited his liquidation of the customer’s brokerage account and subsequent transfer of funds into the jointly owned account where money was withdrawn by Clason.
FINRA’s investigation into Clason’s activities ensued and on August 27, 2020, the regulator asked that Clason provide documents and information. Clason was expected to provide this material to FINRA in September 2020 to comply with FINRA rules. On September 8, 2020, FINRA personnel received a phone call from Clason’s legal counsel who alerted the regulator that Clason would not be cooperating with its request for documents and information. The AWC stated that Clason’s refusal to provide that material constituted the violation of FINRA Rules 2010 and 8210.
Clason has also been charged by Securities Exchange Commission (SEC) with defrauding and misappropriating funds belonging to one of his advisory customers. Securities and Exchange Commission v. Matthew O. Clason Civil Action No. 3:20-CV-01279 (Sept. 1, 2020). According to the Complaint, a retail investor’s funds had been stolen by Clason between December 2018 and September 2020.
The Complaint stated that the investor held accounts with Clason at LPL Financial. The customer and Clason allegedly had a personal relationship that enabled the stockbroker to sell securities which the customer held in an LPL Financial brokerage account. These securities liquidations were purportedly part of a process by which Clason would gain control of assets and then transfer those assets elsewhere while also taking cash withdrawals for his benefit.
SEC alleged that none of the transactions initiated by Clason had been known or authorized by the customer. The Complaint stated that the customer’s and Clason’s personal relationship was exploited by the stockbroker in breach of his fiduciary duty. SEC alleged that Clason misappropriated and defrauded the customer out of hundreds of thousands of dollars which constituted the violation of Investment Advisers Act of 1940 Sections 206(1) and 206(2). SEC aims for Clason’s assets to be frozen and for him to be ordered to cease and desist violating federal securities laws.
Clason was employed by LPL Financial between October 7, 2016 and September 11, 2020.