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Michael McDermott Suspended by FINRA

May 9, 2022 FINRA Suspension

Michael McDermott (CRD #: 2745406), formerly of Wells Fargo, has been suspended by FINRA, according to his BrokerCheck record, accessed on May 2, 2022. If you want to know more about Michael McDermott’s conduct as a broker, keep reading.

Suspension by FINRA

In a regulatory action filed on March 28, 2022, Michael McDermott consented to findings that he allegedly executed unauthorized trades in a client’s account before and after their death and falsified records.

The Acceptance, Waiver, and Consent (AWC) agreement alleges Michael McDermott placed an unauthorized trade in the client’s account in January of 2019. According to the filing, Michael McDermott was unaware of his client’s death in March when he placed multiple stop-loss orders in the client’s accounts in April. Several of these orders were later canceled, according to the AWC, but three were executed.

Further, the AWC alleges that on April 8, 2019, Michael McDermott entered an inaccurate note into the Wells Fargo Clearing Services electronic customer note system claiming that he had spoken to his already-deceased client about the stop-loss orders. This is not possible, since his client died in March. He allegedly edited this note on May 15, 2019, to state that this conversation happened in January.

According to the AWC, these allegations constitute violations of FINRA Rules 4511 and 2010.

FINRA Rules 4511 and 2010

FINRA Rule 4511 requires firms to maintain accurate books and records, and FINRA Rule 2010 states that brokers must follow high standards of commercial honor.

Sanctions

Following the filing of this action, Michael McDermott consented to a three-month suspension from associating with FINRA members. The suspension began on April 4, 2022 and will end on July 3, 2022.

You can read the full AWC here.

Employment Termination 

Wells Fargo fired Michael McDermott following his allegedly unauthorized stop-loss orders. 

Background Information

Michael McDermott has passed the following exams:

  • Series 65 - Uniform Investment Adviser Law Examination
  • Series 63 - Uniform Securities Agent State Law Examination
  • SIE - Securities Industry Essentials Examination
  • Series 31 - Futures Managed Funds Examination
  • Series 7 - General Securities Representative Examination
  • Series 10 - General Securities Sales Supervisor - General Module Examination
  • Series 9 - General Securities Sales Supervisor - Options Module Examination

He has also worked for the following firms:

  • Wells Fargo Clearing Services (CRD#:19616)
  • Morgan Stanley (CRD#:149777)
  • Morgan Stanley & Company (CRD#:8209)
  • Morgan Stanley DW (CRD#:7556)

Kurta Law Can Help

If you worked with Michael McDermott 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.