Moors & Cabot Fined $250,000 for Disclosure Failures
We are currently investigating allegations made against Moors & Cabot, a Boston, Massachusetts-based securities brokerage firm. FINRA (the Financial Industry Regulatory Authority) brought a regulatory action against the firm, alleging that it failed to adequately disclose in writing to firm customers that it earned compensation for about 11,500 trades effected in customer accounts.
Some firms like Moors & Cabot own an inventory of investment products, sometimes for only a short period time. In this particular case, they purchased a number of preferred securities from some customers and then sold them to other customers. When these 11,500 transactions were made, the brokerage firm failed to disclose the price difference between what the customer paid for the security, and what the brokerage firm paid for them. The difference for these 11,500 transactions added up to $7.5 million in additional revenue to the firm. To settle these allegations, Moors & Cabot paid a fine of $250,000.
Israels & Neuman PLC is a securities and investment fraud law firm with offices in Denver, Colorado, and Seattle, Washington. We represent investors in FINRA arbitration proceedings in all 50 states, including numerous investors in the past throughout Massachusetts, such as victims of the Doug Simanski Ponzi scheme. Our attorneys have recovered millions of dollars for investors against many brokerage firms in the past.