Posted April 18th, 2018.
Suit Follows on $2.1 Million Award Obtained Against Madison Avenue Earlier This Year
SAN DIEGO, April 18, 2018 – Sanford Heisler Sharp, LLP has filed an arbitration claim with the Financial Industry Regulatory Authority (FINRA) against Madison Avenue Securities alleging the firm violated its basic duty to diligently supervise one of its stockbrokers who had a disciplinary history of misusing customer funds. The claim alleges that Madison Avenue’s lax supervision allowed the stockbroker to fraudulently misappropriate the customer’s money for his own personal use. In filing the claim David Sanford noted, “This is not the first time that Madison Avenue and the stockbroker have been the subject of these types of claims. In January 2018, Sanford Heisler Sharp obtained a $2.1 million award against Madison Avenue Securities and the same stockbroker for breach of fiduciary duty, fraud, and negligent supervision.”
The victim, Matt Rocca, had been a customer of the stockbroker for over 20 years, and his father before that. According to the claim, the stockbroker preyed on that loyalty and persuaded Mr. Rocca to send him funds to buy a fractional interest in a jumbo certificate of deposit. But rather than buying the CD for Mr. Rocca, the stockbroker secretly pocketed the money according to the claim. The claim further alleges that when the CD was to become due and payable, the stockbroker pledged stock in Mr. Rocca’s Madison Avenue brokerage account as collateral, borrowed funds against the stock, and sent Mr. Rocca his own money claiming they were CD proceeds. The unsuspecting Mr. Rocca became aware of the betrayal in March 2018.
The claim further alleges that Madison Avenue Securities turned a blind eye to the mismanagement of the customer’s account, which allowed the stockbroker to load the customer’s portfolio with volatile energy stocks and unsuitable derivative securities. The consequence of the stockbroker’s misconduct was substantial. An account that opened in March 2015 with $1.5 million in value was worth $1,500 by the end of 2017.
Madison Avenue Securities is a registered broker-dealer located in San Diego, California with branches coast to coast. Mr. Rocca is seeking recovery of his vanished savings. He is also seeking to recover his attorneys’ fees and an unspecified award of punitive damages pursuant to California Civil Code §3294.
Charles Field, a lawyer for Mr. Rocca, added, “Madison Avenue knew that its stockbroker had been fired from a prior firm and fined and suspended by FINRA for misusing client funds. Instead of placing the stockbroker under heightened supervision, Madison Avenue designated him as the person-in charge of a remote branch office and took a hear-no evil, see-no evil approach to supervision. A punitive damages award will serve to deter Madison Avenue Securities and other firms who might consider the same type of action from placing unqualified individuals in management positions and to encourage closer control over its stockbrokers.”
About Sanford Heisler Sharp, LLP
Sanford Heisler Sharp, LLP is a national public interest class-action litigation law firm, which has offices in New York, Washington, D.C., San Francisco, San Diego, Nashville and Baltimore. Sanford Heisler Sharp focuses on employment discrimination, wage and hour, qui tam, and financial services matters. The firm represents select individual clients such as executives, lawyers in employment disputes, and whistleblowers. The firm has recovered over $1 billion for its clients. For more information, call 202-499-5202 or email firstname.lastname@example.org. More information about the firm and its successes can be found at www.sanfordheisler.com. For the latest news visit our newsroom or follow us on Twitter at @sanfordheisler.