The Financial Industry Regulatory Authority (FINRA) has sanctioned Kenneth Andrew Mauchin, a former broker at Atlanta, Georgia based SunTrust Investment Services, Inc., based on findings that Mr. Mauchin withdrew $23,750 from customer accounts and used the funds to purchase cashier's checks that he deposited into an account that he controlled. Mr. Mauchin falsely listed his work address as the mailing address for customer accounts, which prevented the customers from detecting Mr. Mauchin's misappropriation of funds. The findings stated that as a result, Mr. Mauchin caused his firm to have misleading books and records. The findings also stated that Mr. Mauchin failed to appear for a FINRA on the record testimony. FINRA's Enforcement Department did not seek restitution because the member firm reimbursed the customers. Mr. Mauchin, of Sanford, Florida, was barred from association with any FINRA member in any capacity.
Broker-dealers must establish and implement a reasonable supervisory system to protect customers from broker misconduct. If broker-dealers do not establish and implement a reasonable supervisory system, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered damages due to prohibited activity such as misappropriation of funds can bring forth claims to recover losses against broker-dealers like SunTrust Investment Services, which should consistently oversee its brokers in order to prevent the above described prohibited conduct.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. Please see our Instablog profile (left column) for ways to contact us and get answers to any of your questions about this blog post and/or any related matter.