Former Berthel Fisher Broker, Mason Gann, Suspended By FINRA For Three Months Based On Allegations Of Risky Options Trading In The Account Of A Senior Investor
Mason Gann (CRD # 4030936) was a Financial Advisor at Berthel Fisher & Co. in Dallas, Texas. Mason Gann has been in the securities industry since since 1999 and previously worked at Milkie/Ferguson Investments.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in January 2020, FINRA sanctioned Kevin Meadow Mason Gann, suspending him for a period of three months. The FINRA sanction was based on allegations that “recommended and effected a risky options-trading strategy in a senior customer’s account, who had limited income, modest retirement savings, and minimal investment knowledge. The findings stated that Gann lacked a reasonable basis for believing that his options recommendations were suitable for the customer, given what he knew about the customer’s investment profile. The customer’s account value was approximately $205,000. Since retiring, the customer had taken $1,500 monthly withdrawals from his IRA to pay for current expenses. The customer had also occasionally withdrawn larger amounts to pay other expenses. The customer informed Gann that he intended to continue withdrawing $1,500 on a monthly basis indefinitely. Although several of the options contracts Gann recommended to the customer were profitable, he lost more than $12,500 as a direct result of the unsuitable options strategy that Gann recommended to him and effected on his behalf. The combined effect of investment losses and steady withdrawals had reduced the customer’s account balance to below $20,000.”
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2018057425201%20Mason%20Gann%20CRD%204030936%20AWC%20%20va.pdf
In 2018, Mason Gann was sanctioned by FINRA for allegedly engaging in unauthorized trading in the accounts of six customers. He was suspended 20 days and fined.
In addition to the FINRA sanctions, Mason Gann has other disclosures reflected on his CRD. In 2013, he was “discharged” by Berthel Fisher for “possible violation of terms of heightened supervision.” Brokers are placed on heightened supervision for a multitude of reasons but traditionally when the brokerage firm recognizes that they present a compliance risk to the firm based on their sales practice history.
Mason Gann also has two settled customer complaints:
- May 2018—”The client alleges that between 2012 to the present, the representative mishandled and misrepresented her account by placing her in unsuitable and risky investments. The client also alleges the firm failed to supervise the activity in her account.” The matter was settled for $31,250.
- January 2018—”The client is concerned that his account will be unable to support his future income requirements. He is alleging that the investments in his portfolio are unsuitable for his risk level and that the firm and the representative failed to watch over his account to prevent losses. He also alleges that the representative placed unauthorized trades in his account and churned to generate commissions.” The matter was settled for $40,000.
For a copy of Mason Gann’s CRD, click https://brokercheck.finra.org/individual/summary/4030936#disclosuresSection
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.
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