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SEC Files Complaint Against Broker Ronald Molo

Ronald Molo (CRD#: 4371241) is a previously registered Broker and previously registered Investment Adviser.

Broker’s Background

He entered the securities industry in 2001 and previously worked for Edward Jones.

Current And Past Allegations Of Conduct Leading To Investment Loss

In November 2021, the United States Securities and Exchange Commission (SEC) filed a civil complaint against Ronald Molo. The complaint states, “The Securities and Exchange Commission (the “Commission”), for its Complaint against Ronald T. Molo, alleges that, without investors’ knowledge or authorization, he stole a total of $800,000 from investors, who are senior citizens, by convincing them to transfer money out of their financial institution accounts for the purported investment in tax-free bonds. In fact, the bonds did not exist. Molo did not tell the investors that he owned the account to which he directed them to transfer their money. Instead of investing the money as Molo had promised, he misused at least $778,000 of the investors’ money for his own personal use. Molo also tried to cover up his fraud by sending approximately $22,000 of the investors’ money back to the investors for supposed interest payments from the nonexistent bonds, using altered cashier’s checks from his bank, funded with money drawn from Molo’s own personal account. When the financial institution discovered Molo’s fraud, it fired him. By engaging in the fraudulent conduct described above, Molo violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, Section 17(a) of the Securities Act, and Sections 206(1) and (2) of the Advisers Act.”

For a copy of the SEC’s announcement, click here.

In addition, Ronald Molo has been the subject of eight disclosures, including two that remain pending, including the following:

  • October 2021 – “Allegations relate to misappropriation of ~$800,000.00 of client funds and fictitious investments. See Illinois Securities Department Notice of Hearing dated October 26, 2021 in matter number 2100455.” The regulatory action was taken by the state of Illinois and is pending.
  • September 2021 – “Respondent Molo failed to respond to FINRA requests for information.” FINRA sanctioned Ronald Molo with an indefinite suspension from all capacities beginning October 25, 2021. The suspension continues until required information is provided to FINRA or the suspension converts to a bar. FINRA stated, “Pursuant to FINRA Rule 9552 and in accordance with FINRA’s Notice of Suspension letter dated September 30, 2021, Molo is suspended on October 25, 2021 from associating with any FINRA member firm in all capacities. If Molo fails to request termination of the suspension within three months of the date of the Notice of Suspension, he will automatically be barred on January 3, 2022 from association with any FINRA member in all capacities pursuant to FINRA Rule 9552(h).”
  • June 2021 – “Client alleges former FA stole funds from them by wiring client funds to a bank account controlled by former FA’s spouse under the guise that they were making an investment.” The customer dispute was settled for $263,119.54.
  • June 2021 – “Client alleges former FA stole funds from them by wiring client funds to a bank account controlled by former FA’s spouse under the guise that they were making an investment.” The customer dispute was settled for $329,644.85.
  • June 2021 – “Client alleges former FA stole funds from them by wiring client funds to a bank account controlled by former FA’s spouse under the guise that they were making an investment.” The customer dispute was settled for $282,237.50.
  • June 2021 – “Registered representative was terminated after clients transferred funds to an external account believed to be related to the registered representative. The transfers were subsequent to the registered representative soliciting a purported investment.” Ronald Molo was discharged by Edward Jones.
  • November 2019 – “The client alleges that the financial advisor made unauthorized trades. The client further alleges that the advisor failed to advise him that early payment of his Brighthouse VUL policy could result in it being converted to a Modified Endowment Contact and failed to provide him information that the policy had so converted.” The customer dispute was settled for $16,000.
  • May 2012 – “THE CLIENT STATES THE FINANCIAL ADVISOR SUGGESTED SHE LIQUIDATE THE AMERICAN FUNDS HELD IN HER RETIREMENT ACCOUNT AND PURCHASE MSF MUTUAL FUNDS. SHE STATES SHE WAS INFORMED THE RETURN WOULD BE 4% AND SHE COULD GET HER MONEY OUT WITH NO PENALTY. SHE STATES SHE WAS NOT INFORMED OF THE COMMISSION ON THE MUTUAL FUND. SHE STATES, WHEN SHE QUESTIONED THE FINANCIAL ADVISOR AFTER RECEIVING HER FIRST STATEMENT, SHE WAS INFORMED THAT HE DID NOT KNOW WHAT SHE WAS CHARGED.” The customer dispute was closed with no action.

For a copy of Ronald Molo’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.  These supervisory duties extend to broker theft from customer accounts.

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 mwolper@wolperlawfirm.com.

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