Understanding financial advisors and their actions is crucial. Raymond’s Advisor, Michael Magruder, was fired over an alleged loan violation. This post will guide you through what happened and why it matters to you.
Keep reading to learn more.
Key Takeaways
Table of Contents
- Michael Magruder was terminated from Raymond James for not disclosing a personal loan he received from a client, violating firm policies and FINRA rules.
- Legal actions resulted in Raymond James being awarded over $1.8 million in damages by FINRA after Magruder’s alleged loan violation.
- After his termination, Magruder faced further legal issues, including a claim settled for more than the requested amount ($189,259.57) and a judgment against him by Merrill Lynch.
- Michael Magruder’s career has included roles at notable financial firms like Merrill Lynch and Morgan, Keegan & Co., before joining Breakwater Capital as an advisor.
- The case underscores the importance of adherence to ethical standards and regulations within the financial industry to maintain client trust and firm integrity.
Background of Michael Magruder’s Termination
Michael Magruder lost his job at Raymond James because he did not tell them about a personal loan he got from a client. He worked for Raymond James before they fired him over this issue.
Allegations of failing to report a personal loan from a client
Michael Magruder faced serious accusations at Raymond James. He got a personal loan from a client but did not report it. This goes against firm policies and rules set by the Financial Industry Regulatory Authority (FINRA).
Firms like Raymond James have strict guidelines about loans to ensure fair and transparent dealings.
In July 2024, a customer filed a complaint against Magruder over this loan. The issue was big enough for Raymond James to take action. They settled the complaint for $189,259.57, which was more than what the client originally asked for ($175,000).
As a result of this incident, Magruder had to leave his job because he broke company rules by not updating his Form U4 with information about the loan.
Employment history at Raymond James
Michael Magruder worked at Raymond James from 2005 to 2010 and again from 2021 until his termination in July 2024. During his time there, he served as an investment advisor. He specialized in various financial services, including mortgages and debt consolidation.
His role allowed him to help clients make informed decisions regarding their portfolios.
Magruder’s history with the company ended due to violations of policies related to customer loans. This led to significant legal actions against him and the firm itself. The Financial Industry Regulatory Authority (FINRA) later suspended him for these issues, reflecting serious breaches of trust within his position at Raymond James & Associates.
Legal Actions Taken Against Magruder
Raymond James took serious steps against Michael Magruder. They filed a claim with FINRA over his alleged loan violation and sought damages and fees related to customer complaints.
Raymond James filed a statement of claim with FINRA
Raymond James took action by filing a statement of claim with FINRA in July 2024. This claim arose from a breach of contract tied to two promissory notes linked to Michael Magruder.
The firm sought $1,807,419.28 in damages, which included 10% interest accruing from the date of his discharge. The case centers on allegations involving Magruder’s personal loan and its impact on client trust.
This legal move marks a significant step for Raymond James as they pursue accountability for the alleged violations. It showcases their commitment to maintaining high standards within the financial industry and protecting clients’ interests.
Awarded damages and fees
The FINRA arbitration panel awarded Raymond James $1,807,419.28 in damages. This amount includes interest for the alleged loan violation by Michael Magruder. The panel also granted an additional $2,450 for procedural fees related to the case.
However, they denied the request for attorneys’ fees due to insufficient evidence. Such substantial damages reflect Raymond James’s commitment to uphold ethical standards in financial advising.
Michael Magruder’s career took a hit after these decisions from FINRA.
Customer complaint and settlement
A customer filed a complaint in July 2024 against Michael Magruder. The complaint alleged that he failed to follow instructions regarding a personal loan request. It also claimed that his actions did not meet the client’s needs.
The case settled for $189,259.57. This amount was slightly higher than the initial damages request of $175,000.
Magruder’s case highlights issues related to private student loans and investment management practices at firms like Merrill Lynch and Raymond James. These concerns have led to significant legal challenges for him, including FINRA’s involvement in his termination and suspension.
Termination and suspension by FINRA
Michael Magruder faced termination and suspension by FINRA due to serious violations. He failed to follow firm policies and did not update his Form U4. This led to claims against him, including a judgment from Merrill Lynch in August 2024 for breach of settlement.
The judgment resulted in a hefty $200,000 plus additional costs and fees.
On October 24, 2024, FINRA suspended Magruder until he pays or discharges the judgment. His situation highlights the importance of compliance in financial services. Next, we will look into Michael Magruder’s career history before joining Breakwater Capital.
Career History of Michael Magruder
Michael Magruder worked at Merrill Lynch and Morgan, Keegan & Co. He now provides advisory services at Breakwater Capital. Each role helped him build his skills in portfolio management and investing.
Readers who want to learn more about his career should keep reading.
Previous employment at Merrill Lynch and Morgan, Keegan & Co.
Michael Magruder began his career in finance at Morgan, Keegan & Co. in 2003. He gained valuable experience working with clients and managing their investments. After his time there, he joined Merrill Lynch.
During his tenure at Merrill Lynch, claims arose against him in August 2024. These claims resulted in a judgment of $200,000 plus costs and fees.
Magruder also worked at Raymond James before transitioning to Breakwater Capital for advisory services. His past roles have helped shape his expertise in portfolio management and investing strategies.
Current advisory services at Breakwater Capital
Breakwater Capital employs Michael Magruder as a managing director. He focuses on servicing retired airline captains and first officers. This firm is affiliated with Chiron Capital Management, which manages nearly $224 million in assets as of last year.
Clients benefit from advice on investing in mutual funds, ETFs, and stocks. They also receive guidance on mortgage refinance options and cash-back programs through various lenders like Capital One.
Magruder’s experience helps him understand the distinctive financial needs of his clients. His team provides customized investment strategies to enhance wealth while minimizing risks associated with market fluctuations and changing mortgage rates.
By utilizing tools such as mortgage calculators, they ensure every decision is informed and advantageous for their clients’ financial futures.
Conclusion
Michael Magruder’s dismissal from Raymond James highlights serious issues in the finance industry. He failed to disclose a personal loan from a client, which led to his termination.
Legal actions followed, with Raymond James claiming over $1.8 million in damages. After losing an arbitration claim and facing further legal troubles, Magruder now works for Breakwater Capital without ties to any other firm.
His case serves as a reminder of the importance of compliance and ethical conduct in financial services.
