PROVIDENCE – Robert S. Graham, a securities broker-dealer, has been fined $15,000 and permanently barred from registering in Massachusetts, according to a recent consent order from Mass. Secretary of the Commonwealth William F. Galvin.
Graham, who resides in Arizona, was censured in connection to violation of state securities laws that involved an elderly Massachusetts woman losing hundreds of thousands of dollars, Galvin’s office said.
The order also covers North Carolina-based Capital Investment Group Inc., or CIG. Graham was registered as a CIG agent in Massachusetts.
In addition to making full restitution to the investor, CIG has been ordered to pay a $50,000 administrative fine and required to conduct a comprehensive review of its policies and procedures.
Galvin’s office described Graham as a prominent business owner in Arizona and former CEO and president of RG Advisory Group of Arizona, a federally registered investments adviser.
According to the order, Graham solicited investments for his private business ventures from his clients at CIG without disclosing his actions to his employer.
In addition to monies he obtained from other investors, Graham solicited $400,000 for his business from the Massachusetts woman, despite the fact that it presented a higher risk than she had indicated was acceptable to her, according to Graham’s office.
It said the woman’s funds were lost because of mismanagement by Graham and his partners, with CIG failing its duty to adequately supervise its agent. When CIG learned of Graham’s actions, the firm did not end his employment even though the firm’s chief of compliance recommended it.
“This is a classic example of a firm shutting its eyes to the violations of their agents who are either big producers or have some type of name recognition within the community,” Galvin said.
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.