FINRA bars broker Stephen DeGroat

Stephen DeGroat, a registered representative formerly with Matrix Capital in New York, NY was suspended from FINRA membership for violations of Rule 9554

FINRA Rule 9554. Failure to Comply with an Arbitration Award or Related Settlement or an Order of Restitution or Settlement Providing for Restitution

provides that a registered representative or a firm that fails to comply with a FINRA arbitration award or a settlement agreement entered into as a result of a FINRA arbitration or mediation proceeding, shall have their license suspended 21 days after notice of the intent to suspend has been sent. In September, 2015 Stephen DeGroat was suspended from FINRA membership for violating Rule 9554.

Stephen DeGroat’s registration and disciplinary history

In order to lawfully sell investments to the public, one must either be registered or exempt from registration.

Stephen DeGroat was registered with the following firms

 02/2011 – 12/2014
MATRIX CAPITAL GROUP, INC.
09/2008 – 04/2010
CHANNEL CAPITAL GROUP LLC
06/1997 – 06/2008
JESUP & LAMONT SECURITIES CORP
According to FINRA’s CRD disclosure report, Stephen DeGroat has been the subject of three customer complaints and three regulatory investigations.

The Law Office of David Liebrader practices exclusively in the field of investment loss recovery. For the past 23 years, we have dedicated our law practice to assisting investors who have been victims of investment fraud via fraudulent and unsuitable investment transactions. During that time we have recovered money for over one thousand individuals, pension plans, trusts and companies. The recoveries we have obtained via judgments, awards and settlements on behalf of our clients exceed $40,000,000.

When investors contact our firm they can expect prompt attention, and a detailed analysis of their issues. Typical claims that we are asked to review involve “unsuitability (where a financial advisor makes investment recommendations that are inconsistent with a customer’s investment objectives), claims for “churning” (where a broker enters into an excessive number of trades for the purpose of generating commissions), claims involving illiquid investments such as private placements (I.e., real estate investment trusts, limited partnerships, equipment leasing and oil and gas drilling programs) as well as claims for violations of state securities laws, which often provide investors remedies like attorney’s fees and interest, if they are successful on the claim.

Since a Supreme Court ruling in the 1980s, most investment related disputes between brokerage firms and their customers have been filed in an arbitration forum hosted by FINRA Dispute Resolution. FINRA, along with the SEC, serves as a securities industry “watchdog” and regulator. Most brokerage firms require their clients to sign binding arbitration agreements, mandating that any disputes between them be arbitrated at FINRA.

Investors pursuing claims at FINRA typically advance claims related to suitability. FINRA rules require that all registered representatives make suitable investment recommendations to their clients. Other claims are based on negligence or breach of fiduciary duty, while another category includes claims based on misrepresentations and fraud. Most claims filed with FINRA are resolved within 15 months, and oftentimes, the cases are resolved via settlement or mediation in under a year.

FINRA’s rules require that all investment recommendations made by licensed financial advisors be suitable in light of a customer’s needs, objectives and risk tolerance. In addition, all registered representatives are required to be properly supervised, with periodic inspections and reviews by qualified supervisors, whose job it is to vigorously investigate suspicions of wrongdoing (red flags).

If you suspect that you have been the victim of investment fraud, or had a financial advisor recommend unsuitable investments to you, call us today for a free, confidential consultation at (702) 380-3131.