M Holdings Securities, Inc. (“M Holdings”) (CRD# 43285) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated M Holdings, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.
If you believe you have a claim against M Holdings, you should strongly consider hiring an investment loss lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.
Can I Sue M Holdings Securities, Inc.?
If you’ve lost money caused by M Holdings and/or its employees’ misconduct then the answer is, YES, you can sue M Holdings but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue M Holdings in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against M Holdings is to call Attorney Pearce at our office at 800-732-2889.
What is M Holdings Securities, Inc.?
M Holdings (CRD# 43285) has been registered with the SEC and FINRA as a broker-dealer and investment advisory firm since 1997. The company is controlled by M Financial Holdings, Inc. and headquartered in Portland, Oregon. Its independent broker-dealer Business Model has grown through acquisition and organic development of primarily one and two person registered representative offices supervised remotely. Today there are over 170 M Holdings branch offices with over 850 registered representatives in every state. It is now one of the 50 largest independent broker-dealer and investment advisory firms in the United States.
M Holdings Securities, Inc. Has Many Different Regulatory Problems
M Holdings’ rapid growth has not been without consequences. There have been for Federal, state and self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) ) for a violation(s) of investment-related rules or regulations. In addition, there have been hundreds of customer complaints filed against M Holdings for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
We have reported and written about these regulatory problems and customer complaints over many years. M Holdings is a repeat offender: there is one SEC and 3 FINRA reported disciplinary proceedings citing the firm with one form of supervisory lapses or another in the last decade.
A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS M HOLDINGS SECURITIES HAS FACED OVER THE YEARS*
M Holdings has been repeatedly censured, warned, and fined over $1 million for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA Sanctions for its supervisory failures are below:
SEC Orders M Holdings To Pay Over $1 Million For Mutual Fund Sales Abuse
The SEC investigated M Holdings and found multiple breaches of fiduciary duty and inadequate disclosures by its registered broker-dealer, and investment adviser M Holdings in connection with its mutual fund share class selection practices and the fees it and/or its associated persons received pursuant to Rule 12b-1 under the Investment Company Act of 1940 (“12b-1 fees”). It found that M Holdings financial advisors purchased, recommended, or held for advisory clients mutual fund share classes that charged 12b-1 fees instead of lower-cost share classes of the same funds for which the clients were eligible. M Holdings and/or its associated persons received 12b-1 fees in connection with these investments. Further, M Holdings and/or its associated persons received 12b-1 fees for advising clients to invest in or hold such mutual fund share classes. M Holdings failed to disclose in its Form ADV or otherwise the conflicts of interest related to (a) its receipt of 12b-1 fees, and/or (b) its selection of mutual fund share classes that pay such fees.
As a result of its findings, the SEC ordered M Holdings to cease and desist from committing or causing any violations and any future violations of Sections 206(2) and 207 of the Advisers Act, censured the firm, and ordered it to pay disgorgement and prejudgment interest to affected investors, totaling $1,022,048.
FINRA Sanctions M Holdings For Private Securities Transaction Supervisory Failures
During one of FINRAs investigations of M Holdings it found that the broker-dealer failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to supervise representatives’ use of consolidated reports. Based on the foregoing, FINRA concluded M Holdings violated NASD Rule 3010 and FINRA Rules 3110 and 2010.
In addition, FINRA found that one of M Holdings’ registered representatives requested the firm’s approval to engage in private securities transactions involving a private offering of limited partnership interests in a commercial real estate project. M Holdings approved his request and then failed to supervise 20 transactions involving sales of the private offering by MS to investors, totaling $18,755,000. As a result, M Holdings violated NASD Rule 3040, and FINRA Rules 3110 and 2010 for which it was censured and fined $135,000.
FINRA Sanctions M Holdings For Unfair Corporate Bond Markups
During one of FINRAs investigations, it found that the broker-dealer sold corporate bonds to a customer and failed to sell such bonds at a price that was fair, taking into consideration all relevant circumstances, including market conditions with respect to each bond at the time of the transaction, the expense involved and that the firm was entitled to a profit. In each instance, the bonds were sold by the same registered representative who was employed in one of the firm’s branches. The conduct described in this paragraph constitutes separate and distinct violations of NASD Rules 2110, 2440 and IM-2440.
FINRA also found that M Holdings’ supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to certain applicable securities laws and regulations, and/or the Rules of NASD. At a minimum, adequate written supervisory procedures addressing quality of markets topics should describe the following:
(a) specific identification of the individual(s) responsible for supervision;
(b) the supervisory steps and reviews to be taken by the appropriate supervisor;
(c) the frequency of such reviews; and
(d) how such reviews shall be documented.
M Holdings written supervisory procedures failed to provide for one or more of the four above-cited minimum requirements for adequate written supervisory procedures, in the following subject areas: fair pricing reviews of fixed income transactions (a – d), and qualifying supervisory personnel (a – d). The conduct described in this paragraph constitutes a violation of NASD Rules 2110 and 3010 for which it was censured, fined $90,000, and ordered to make restitution of approximately $31,000 to investors.
*Above are only some of the regulatory disciplinary actions filed against M Holdings by FINRA. There is at least one more SEC, FINRA, NASSA and/or other state securities regulator investigations and enforcement actions reported on BrokerCheck as regulatory disciplinary proceeding disclosures.
M Holdings Securities Customer Complaints
There have been scores of customer complaints filed against M Holdings stockbrokers and investment advisors over the years.
If you have lost money investing with any of these M Holdings advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call us at 800-732-2889.
Why Does M Holdings Securities, Inc. Have So Many Regulatory Problems And Customer Complaints?
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.
These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.
Did M Holdings Securities, Inc. Advisor Misconduct Cause You Investment Losses?
When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. M Holdings is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting M Holdings without representation with an attorney about their complaints and have their complaints denied.
Consult With An Attorney Who Recovers Investment Losses Caused By M Holdings Securities, Inc. Today!
The attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with M Holdings cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.
Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.