Madison Avenue Securities

Kurta Law is investigating recommendations by Madison Avenue Securities (CRD#: 23224) brokers. Investors should be aware of the firm’s conflicts of interest and reach out to a securities attorney if they identify red flags for broker misconduct. Madison Avenue Securities is a dually-registered broker-dealer and investment advisor headquartered in San Diego, California.

Madison Avenue Securities has also done business as Ashland Securities.

Fees and Conflicts of Interest

In its Customer Relationship Summary (Form CRS), Madison Avenue Securities discloses the following fees and conflicts of interest investors should know about:

• Investment advisory accounts may charge fees based on a percentage of your assets, paid either to Madison Avenue Securities or to a third party manager, depending on the type of account.
• Brokerage accounts typically charge commissions on transactions, incentivizing the firm to encourage trading. Some accounts also charge annual custodial fees.
• Direct business accounts, a type of brokerage account, charge commissions paid by the issuer to the firm. Madison Avenue Securities typically receives greater compensation the more you invest in a direct business account. Investments made in this type of account generally charge additional fees and expenses.
• Certain investments, like mutual funds and exchange-traded funds (ETFs), will charge additional fees.
• Investors who use Madison Avenue Securities’ financial planning services will be charged either an hourly rate, flat fee, and/or an annual fee.
• Madison Avenue Securities has agreements with third party companies to share revenue, expenses, technology, and other benefits with the firm. For example, the firm has marketing arrangements with certain insurance carriers in exchange for promoting their variable annuities.
• Financial professionals registered as insurance agents may be compensated by insurance companies when selling insurance products to firm clients.

Broker-Dealer Services

Besides stocks and bonds, Madison Avenue Securities also offers the following investment vehicles. However, investors should know that these products can be overly risky.

• Mutual funds
• Exchange-traded funds (ETFs)
• Options
• Structured products
• Annuities, including variable annuities
• Real estate investment trusts (REITs)
• Private placements

Regulatory Actions

Madison Avenue Securities discloses the following regulatory actions on its detailed BrokerCheck record.

Alleged Failure to Supervise

On May 1, 2023, Madison Avenue Securities consented to the entry of findings that it allegedly failed to establish a system of supervision designed to supervise the suitability of mutual fund transactions executed through its clearing firm from January 2016 through December 2018.

A Letter of Acceptance, Waiver & Consent (AWC) alleges that the firm failed to adequately identify when clients would be eligible for mutual fund sales charge discounts by purchasing mutual funds within the same mutual fund family instead of making purchases in several fund families.

FINRA censured the firm and ordered it to pay a $50,000 fine and $63,296 disgorgement, plus interest. You can read the full AWC here.

Alleged Failure to Disclose Conflicts of Interest

On May 31, 2022, the Securities and Exchange Commission filed a regulatory action against Madison Avenue Securities, alleging that the firm failed to provide sufficient disclosure concerning conflicts of interest associated with its receipt of revenue sharing payments from its clearing broker and 12b-1 fees from mutual funds.

The SEC alleged that the firm failed to recommend favorable mutual fund classes to investment advisory clients and failed to determine whether the recommended funds were in clients’ best interests.

Additionally, the firm allegedly failed to implement policies and procedures to prevent violations of the Investment Advisers Act of 1940 with regard to revenue sharing and mutual fund share class selection.

The SEC ordered Madison Avenue Securities to cease and desist from violations of Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 thereunder. The firm was also ordered to pay a fine of $150,000, restitution of $579,523.76, and $73,649.93 of prejudgment interest.

FINRA Censure and Fine

On December 5, 2016, Madison Avenue Securities consented to the entry of findings that it allegedly failed to establish a supervisory system or written procedures to supervise the creation and distribution of consolidated reports, including the verification of manually entered information. A consolidated report is an informational document provided by a broker about their client’s account and assets.

FINRA censured the firm and fined it $75,000. You can access the AWC here.

Brokers with Misconduct Allegations on Their Records

Kurta Law is aware of the following current or former brokers with investor disputes on their records associated with Madison Avenue Securities. This is not a complete list, so investors with concerns about their brokers should reach out to a securities attorney.

• Jim Geake: https://www.kurtalawfirm.com/blog/jim-geake/ 
• Daniel Werts: https://www.kurtalawfirm.com/blog/daniel-werts/ 
• Ashley Robinson: https://www.kurtalawfirm.com/blog/ashley-robinson/ 
• Jeffrey Buck: https://www.kurtalawfirm.com/blog/jeffrey-buck/ 
• Stephen Kwan: https://www.kurtalawfirm.com/blog/stephen-kwan/ 
• John Thomas: https://www.kurtalawfirm.com/blog/john-thomas/ 
• Ann Werts: https://www.kurtalawfirm.com/blog/ann-werts/ 
• Dimitry Tikhinov: https://www.kurtalawfirm.com/blog/dimitry-tikhinov/ 

Kurta Law Can Help

Investors who lost money working with a Madison Avenue Securities broker or advisor should reach out to an investment fraud lawyer for help. Our attorneys offer free case evaluations and do not charge a fee unless we win your case. Call (877) 600-0098 or email info@kurtalawfirm.com.