- September 8, 2023
- Charles Schwab & Co.
Ethan Martin (CRD#: 7376480) was a previously registered broker and is now barred from acting as a broker or otherwise associating with a broker-dealer firm.
He entered the securities industry in 2021. He spent his career as a registered broker at Charles Schwab & Co., Inc.
Allegations of Misconduct
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in September 2023 FINRA barred Ethan Martin indefinitely for converting customer funds and violating FINRA Rules 2150(a), 8210 and 2010. The FINRA sanction details, “During the relevant period, Martin worked as a Brokerage Service Specialist with Charles Schwab and was responsible for answering telephone calls from customers regarding, among other things, establishing direct deposits. On May 26, 2022, a married couple, one of whom was a senior customer, contacted Martin at the firm’s customer service phone number seeking assistance with setting up a direct deposit of monthly social security payments into their joint firm brokerage account. That same day, Martin emailed the customers’ instructions for setting up a direct deposit. In the email, rather than providing the customers’ account number, Martin provided the account number for his own personal Charles Schwab brokerage account. Between June and September 2022, Martin received three electronic deposits of the customers’ monthly social security payments, totaling $6,981, into his personal firm brokerage account. Martin then converted and improperly used the customers’ funds for his own personal investments and expenditures. Therefore, Martin violated FINRA Rules 2150(a) and 2010.”
Additionally, “On June 30, 2023, in connection with this investigation, FINRA sent Martin a request for information and documents pursuant to FINRA Rule 8210, which Martin has acknowledged receiving. The deadline for responding was July 14, 2023. Martin did not respond to FINRA’s request. On July 14, 2023, FINRA sent Martin a second request, pursuant to FINRA Rule 8210, for the previously requested information and documents, with a deadline of July 21, 2023, which Martin has acknowledged receiving. Martin did not respond to FINRA’s request by the July 21st deadline or at any other time. Therefore, Martin violated FINRA Rules 8210 and 2010.”Ethan Martin was barred indefinitely starting on September 5th 2023.
For a copy of the FINRA Sanction, click here.
In addition, Ethan Martin has been the subject of one other disclosure, which includes the following:
- September 2022—Employment Separation After Allegations, “Employee e-emailed a screenshot of his personal account number to a client who requested direct deposit instructions.” Charles Schwab & Co., Inc., discharged Ethan Martin.
For a copy of Ethan Martin’s FINRA BrokerCheck, click here.
We Help Investors Recover Investment Losses
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
Quantitative suitability requires a brokerage firm or financial advisor with actual or de facto control over a customer’s account to have a reasonable basis for believing that a series of recommended transactions – even if suitable when viewed in isolation – is not excessive and unsuitable for the customer when taken together in light of the customer’s investment profile. No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer’s account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation.
Customer-specific suitability requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer’s investment profile. Among the criteria that a financial advisor must evaluate to satisfy his or her customer-specific suitability obligations include the investor’s age, tax status, time horizon, liquidity needs, and risk tolerance; a client’s other investments, financial situation and needs, investment objectives, and any other information disclosed by the customer should also be considered.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at email@example.com.