Securities Lawyers Blog
The law offices of Gana Weinstein LLP are currently investigating claims that Broker John Matson (Matson) has been accused by investors of engaging in fraudulent misappropriation of their funds. According to records kept by The Financial Industry Regulatory Authority (FINRA), it appears that Matson was employed by LPL Financial LLC at the time of the activity. If you have been a victim of Matson’s alleged misconduct our firm may be able to assist you in recovering funds.
FINRA BrokerCheck shows a final customer complaint on December 20, 2024.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted against John N. Matson (‘Matson’ or ‘Respondent’). In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the ‘Offer’) which the Commission has determined to accept. On the basis of this Order and Respondent’s Offer, the Commission finds that between March 2007 and July 2015 and from November 2017 to December 2022, Matson was a registered representative and investment adviser representative of a firm dually registered with the Commission as a broker-dealer and investment adviser. Between June 2015 and November 2017, Matson was a registered representative and investment adviser representative of a second firm dually registered with the Commission as a broker dealer and investment adviser. On September 23, 2024, a judgment was entered by consent against Matson, which, among other things, permanently enjoined him from future violations of Section 17(a) of the Securities Act of 1933 (‘Securities Act’), and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, as set forth in the judgment entered in Civil Action Number 3:24-CV-01342, in the United States District Court for the Southern District of California. The Commission’s complaint in that litigation alleged that, between January 2012 and September 2021, Matson sold securities with a face value of $1,560,000 issued by South Bay Acquisitions LLC (‘South Bay’), a company controlled by him, to five investors (collectively ‘the investors’), raising approximately $1,535,000. The securities, which were denoted ‘LLC Bonds’ and were functionally promissory notes, included language stating that the Matson and South Bay would manage the proceeds as fiduciaries and promising 12 to 20% interest. The complaint further alleged that, despite his obligation to act as a fiduciary and without disclosure to investors, Matson immediately and consistently transferred investor money from South Bay to his personal account to use for personal expenses. The complaint also alleged that Matson operated the program as a Ponzi scheme, using investor funds to pay promised returns to earlier investors.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $300,000.00 on July 27, 2023.
Customer alleges that representative sold her a promissory note in the amount of $300,000 in February of 2019, away from the firm.
We have a strong track record of advocating for victims of fraud when advisors obtain loans from clients or engage in securities sales via OBAs. The practice of selling unapproved investments, promoting fraudulent schemes to hide misused funds, and engaging in other deceptive acts is known in the industry as “selling away,” a major infraction of securities laws. In the industry, “selling away” describes a financial advisor soliciting investments in companies, promissory notes, or other securities that lack prior approval from their affiliated brokerage firm. In some cases, these investments are legitimate, but more often than not, they result in Ponzi schemes or financial advisors converting funds for personal use.
However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. Firms are required to have protocols in place to oversee their brokers by tracking each advisor’s activities and public interactions. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Matson has been in the securities industry for more than 26 years. Matson has been registered as a Broker with LPL Financial LLC since 2017.
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.
