According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Soichiro Moro (Moro), previously associated with Genesis Global Trading, Inc, has at least one disclosable event. These events include one tax lien, alleging that Moro recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on January 17, 2025.
The Securities and Exchange Commission (‘Commission’) deems it appropriate that cease and-desist proceedings be, and hereby are, instituted against Soichiro ‘Michael’ Moro (‘Respondent’ or ‘Moro’). In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement which the Commission has determined to accept. The commission finds that In June and July of 2022, Moro, while serving as Chief Executive Officer (‘CEO’) of Genesis Global Capital, LLC (‘Genesis’), negligently engaged in conduct that misled investors in a lending program that Genesis offered and sold to retail investors with another company. Genesis offered investors yield in return for the investors tendering bitcoin or other crypto assets to Genesis. Genesis commingled investors’ crypto assets and typically lent those assets out to institutional borrowers-generating revenue by charging interest to those borrowers. In mid-June 2022, Genesis suffered a significant financial loss-stemming from a large borrower’s default-that put Genesis’s viability as a business at risk. Yet, Moro negligently engaged in conduct that misleadingly downplayed the impact of that default and overstated what Genesis’s parent company, Digital Currency Group (‘DCG’), did to help Genesis in the aftermath. In short, Moro’s failure to exercise reasonable care created a materially false or misleading impression to the public regarding Genesis’s financial health. In November 2022, faced with a wave of redemption requests that it could not satisfy, Genesis suspended withdrawals. It filed for bankruptcy in January 2023.
Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated ‘Regulation Best Interest (Reg BI)‘ which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.
Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. Every recommendation’s cost and investor details are essential parts of material information. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.
In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. Thus, without conducting its own reasonable investigation, a brokerage firm cannot depend solely on the issuer for information about a company.
Another protective measure is to require broker discloses. Brokers are required to reveal important events, such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters, publicly on their BrokerCheck reports. FINRA has recognized that recent research shows brokers with a past record of regulatory or customer complaint issues are more likely to have such problems again in the future. FINRA’s Office of the Chief Economist (OCE) published a study showing the predictability of disciplinary and disclosure events based on past similar events. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.
Moro has been in the securities industry for more than 17 years. Moro has been registered as a Broker with Genesis Global Trading, Inc since 2009.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.