Clarence Smith Fired from Calton & Associates Following FINRA Suspension

Clarence Smith (CRD #: 2939228), a broker formerly registered with Calton & Associates, was recently suspended by FINRA, according to his BrokerCheck record, accessed on February 14, 2023. Read on to learn more about his alleged conduct as a broker.

Termination from Calton & Associates

On January 9, 2023, Clarence Smith was fired from Calton & Associates after allegedly failing to inform the firm that he was the subject of a FINRA investigation concerning his alleged impersonation of a client in September 2020.

FINRA Suspension

On December 29, 2022, Clarence Smith consented to the entry of findings that he allegedly impersonated a client in a phone call in September 2020.

According to a Letter of Acceptance, Waiver & Consent (AWC), Clarence Smith allegedly provided tax services to individuals as an outside business in September 2020. Clarence Smith allegedly made a phone call to another brokerage firm where one of his tax clients had an account.

During this call, he allegedly impersonated the client, answered verification questions, and requested a $2,600 distribution be sent to the client’s address of record. The AWC alleges that, while the tax client had authorized the distribution, he did not authorize Clarence Smith’s impersonation of him.

The AWC concludes that this alleged misconduct violated FINRA Rule 2010.

FINRA Rule 2010

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.

Sanctions

Clarence Smith consented to the following sanctions:

• $5,000 fine
• 15 business-day suspension

His suspension ran from January 17 to February 6, 2023.

You can read the full AWC here.

Investor Dispute

On August 18, 2015, an investor filed a dispute alleging that Clarence Smith sold him unsuitable alternative investments in December 2007 and November 2008. The client also alleged that he engaged in negligence, made misrepresentations, and violated the Michigan Uniform Securities Act.

The client sought $260,000 in damages and received a settlement of $90,000.

FINRA Rule 2111

FINRA Rule 2111 requires brokers to recommend securities that adequately fit an investor’s financial goals. Brokers must take into account the information described in an investor’s profile, such as their risk tolerance, tax status, and other investments.

Investors who rely on brokers for recommendations may be able to recover their losses through FINRA arbitration.

FINRA Rule 2020

FINRA Rule 2020 forbids the use of manipulation, deception, and other fraudulent means of influencing the purchase and sale of securities. Misrepresenting an investment’s potential returns, limitations, or other features violates this rule.

What qualifies as broker negligence?

Many types of broker misconduct may qualify as negligence. Examples of broker negligence include recommending unsuitable investments, executing unauthorized trades, and failing to supervise other brokers.

Investors who have lost money through broker negligence may be able to recover their losses by pursuing FINRA arbitration.

What are blue sky laws?

Blue sky laws are state regulations that give investors an additional layer of protection against securities fraud. These laws may also define what investments qualify as securities in the state.

Background Information

Clarence Smith has passed the following exams:

• Series 63 – Uniform Securities Agent State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 22 – Direct Participation Programs Representative Examination
• Series 6 – Investment Company Products/Variable Contracts Representative Examination

He has also worked for the following firms:

• Calton & Associates (CRD#:20999)
• Securities America (CRD#:10205)
• Dalton Strategic Investment Services (CRD#:23485)
• National Planning Corporation (CRD#:29604)
• H. Beck (CRD#:1763)

Kurta Law Can Help

If you worked with Clarence Smith and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.