FINRA Sanctions Paulson Stockbroker For Unauthorized Trading
Michael Patrick Nixon has been fined $5,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by findings that Nixon executed trades in accounts of Paulson Investment Company customers without written authorization from either customers or the securities broker dealer. Letter of Acceptance Waiver and Consent No. 2018056269002 (Aug. 16, 2019).
According to the AWC, from May of 2017 to May of 2018, sixty-six trades had been placed in the accounts of nineteen customers by Nixon through his exercise of discretion. The AWC stated that customers were not properly contacted by Nixon on days he effected transactions to confirm that they approved of the trades. FINRA also indicated that there was no written authorization possessed by Nixon warranting any trades on a discretionary basis; and Nixon’s discretionary authority was never granted by Paulson Investment Company.
The AWC stated that Nixon completed an annual compliance certification in December of 2017 regarding his activities where he failed to reveal that he used discretionary authority to effect trades in Paulson Investment Company customer accounts. Nixon represented that he did not hold any discretionary authorization from customers. FINRA found Nixon’s conduct violative of FINRA Rules 2010 and National Association of Securities Dealers (NASD) Rule 2510(b).
FINRA Public Disclosure confirms that Nixon is referenced in two customer initiated investment related disputes containing accusations of his violative conduct while employed with American Frontier Corporation, Newport Coast Securities Inc. and Paulson Investment Company. In fact, Nixon was subject of a customer initiated investment related arbitration claim where the customer was awarded compensatory damages based upon Nixon being found liable on claims which included the failure to exercise fiduciary duty; negligent handling of the customer’s investment portfolio; and false or misleading statements which led the customer’s Jabil Circuit Inc. common stock positions to be inappropriately liquidated from the customer’s account.
Another customer filed an investment related arbitration claim concerning Nixon’s activities in which the customer sought $3,000,000.00 in damages founded on allegations that contractual obligations had been violated; investment recommendations made to the customer failed to be suitable; securities purchases were inappropriate; fiduciary obligations were breached; transactions ran afoul of Virginia Securities Act and Florida Securities Act; the customer was a victim of securities fraud; and Newport Coast Securities or Paulson Investment Company failed to supervise Nixon’s activities in the customer’s account. FINRA Arbitration No. 18-02421 (July 9, 2018).
Everyone of the last ten broker-dealers where Nixon was registered are defunct or who have been expelled by securities regulators for violation of federal securities laws or self-regulatory rules.