Peiffer Wolf Carr & Kane is currently investigating claims against Gary Mastrodonato, a previously-registered broker at Madison Avenue Securities in Oriental, North Carolina after being contacted by a former client who had experienced losses related to in alternative investments and variable annuities.
Variable annuity complaints are not new for Mastrodonato. On July 27, 2009, Securities America terminated Mastrodonato “for cause for failing to follow firm policies and procedures relating to the submission of [annuity] business.”
On April 19, 2012, Mastrodonato was suspended for 30 days and fined $10,000 by his regulator, the Financial Industry Regulatory Authority (“FINRA”) based on its findings that Mastrodonato:
[C]ircumvented his firm’s supervisory system and procedures by submitting, or causing to submitted, 14 variable annuity exchanges for 12 customers directly to a product sponsor prior to receiving his firm’s trade approval. These transactions that bypassed the firm’s supervisory system had a total market value of over $1.3 million. Of particular concern, after learning of his firm’s disapproval of two transactions for customer LS, he failed to either inform his firm of the submissions directly to the product sponsor or withdraw the applications from the product sponsor. By intentionally circumventing his firm’s supervisory review process, Mastrodonato violated FINRA Rule 2010.
On April 29, 2016, Mastrodonato was the subject of a customer complaint for churning variable annuities.
According to FINRA’s BrokerCheck website for Public Disclosures, Gary Mastrodonato has been the subject of four disclosures. Some of the more notable disclosures are as follows:
2009: Employment Separation After Allegations – Securities America discharged him and alleged that “the representative was terminated for cause for failing to follow firm policies and procedures relating to the submission of business.
2011: Regulatory – Suspension from Industry and $10,000 Civil and Administrative Penalty(ies)/Fine(s). FINRA’s allegations state, “Mastrodonato circumvented his member firm’s supervisory systems and procedures and review process by submitting at least 12 variable annuity exchange applications directly to the annuity product sponsor to be processed without Mastrodonato’s firm’s supervisory review. Additionally, when two exchange requests were denied by Mastrodonato’s firm, Mastrodonato failed to inform the firm that the had already submitted the material directly to the annuity product sponsor. Nor did he withdraw the applications from the annuity product sponsor. Mastrodonato knew that by submitting the requests directly to the annuity product sponsor, they would be processed without his firm’s review or approval.”
2019: Pending Customer Dispute – Damages Requested: $61,348. Allegations state, “Misrepresentation of the liquidity for the product sold. In September 2014, the client invested in American Realty Company. The client feels they were given poor investment advice. They were sold an illiquid product when they wanted short term liquid investment [sic].” The Statement of Claim also lists, “Violations of FINRA Rule 2110, Violations of FINRA Rule 2111, Negligence, Misrepresentations and omissions of material facts, and breach of fiduciary duty.”
Another concerning feature of Mastrodonato’s career is the frequency with which he changes brokerage firms. In a 38-year career, he has been registered with 20 different brokerage firms. His longest tenure at a brokerage firm was at Securities America, the firm that unceremoniously fired him in 2009. Since his termination from Securities America, Mastrodonato has been registered with 5 different brokerage firms.
More concerning still, in February 2019, Mastrodonato’s clients received a letter from his most recent brokerage firm, Madison Avenue Securities, informing them that Mastrodonato “will no longer be servicing [their] account(s).” No explanation or reason was given for his sudden departure.
FINRA maintains a database of investor complaints and disciplinary and employment history for registered representatives and publishes some of this information on its BrokerCheck website, www.brokercheck.finra.org. To review Bryon Martinsen’s Brokercheck report, click here: https://brokercheck.finra.org/individual/summary/723366
Based on our review of his former client’s account, we have reason to believe that Mastrodonato continued to oversell variable annuities until very recently, including churning them, despite his prior regulatory issues. We also believe he oversold alternative investments.
Financial advisors (brokers) have a legal obligation and regulatory obligation to recommend only suitable investments that are appropriate for their individual clients. Their broker-dealer (employing brokerage firm) has a legal obligation and regulatory obligation to supervise the financial advisor’s sales practices and dealings with clients. To the extent that any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
Based on our experience, we believe that there are more investors who have been the victim of Mastrodonato’s alleged broker misconduct and investment fraud. If you’ve worked with or invested with Gary Mastrodonato, you should contact Peiffer Wolf Carr & Kane immediately for a FREE Consultation.
Peiffer Wolf Carr & Kane is currently investigating Gary Mastrodonato’s practices, as well as the products he recommended to individual investors. Concerns about possible broker misconduct and investment fraud are serious, and we are committed to fighting on behalf of investors. Contact Us Today for a FREE Consultation. 585-310-5140
If you believe you were a victim of predatory lending, investment fraud, or broker misconduct, it is imperative to take action. Peiffer Wolf Carr & Kane has represented thousands of victims, and we remain committed to fighting on behalf of investors. We focus on identifying parties that are not only liable but have the financial ability to compensate victimized investors. Our goal is to put money back into our clients’ pockets.