FINRA panel orders ex-broker to pay $260K for allegedly inflating his production
A FINRA arbitration panel ordered an ex-broker to pay his former employer, Jeffrey Matthews Financial Group, $260,000 for allegedly making false claims about his production levels prior to joining the firm.
The dispute stems from the circumstances under which Donald Lee Watson Jr. left Stifel in 2015 to join Jeffrey Matthews Financial.
The firm claims that Watson stated that his gross production at Stifel had been more than $700,000 per year, presenting a W-2 form as proof, according to a note from Jeffrey Matthews Financial made on Watson's FINRA BrokerCheck record.
Based on that figure, Jeffrey Matthews Financial paid him a $200,000 compensation advance, the firm says. But the firm claims that it later learned that the $700,000 was not based on production, and that his client spreadsheet was also fraudulent, according to the firm’s statement.
Jeffrey Matthews Financial also claims that Watson didn’t transition any clients to the firm and had no gross production during his short stint there from Sept. 29, 2015, to Dec. 15, 2015. He was discharged from the firm, according to FINRA BrokerCheck records.
Watson’s statement of response to the FINRA panel asked that the claim be denied, but he did not appear at the FINRA arbitration hearing. The panel’s decision was dated Nov. 14.
Jeffrey Matthews Financial, based in Florham Park, New Jersey, did not respond to a request for comment. Multiple attempts to reach Watson were unsuccessful.
A broker typically has 30 days to comply with an FINRA arbitration decision, and if he or she fails to do so, FINRA will move to suspend the broker until the award is paid, says Michelle Ong, director of media relations for the regulator.
According to FINRA Brokercheck, Watson worked for Stifel from May 2015 to September 2015, and started work at his own firm, D.L. Watson & Co. in Sarasota, Florida, in December 2015. He is not currently registered with any brokerage firm.