What You Need to Know
- The former broker allegedly refused to cooperate with Merrill Lynch and FINRA investigations.
- His former firm and FINRA were trying to learn if he improperly applied for a COVID loan.
- Not cooperating with a FINRA investigation is a surefire way to be barred from the industry.
The Financial Industry Regulatory Authority has barred a former Merrill Lynch general securities representative from associating with any FINRA member in all capacities after he refused to cooperate with investigations by both the firm and the industry self-regulator into whether he improperly requested and received a COVID-19 Economic Injury Disaster Loan.
Without admitting or denying FINRA’s findings, Scott Madison signed a FINRA letter of acceptance, waiver and consent on Aug. 18, agreeing to be barred from the industry. FINRA signed the letter Monday.
Merrill declined to comment Friday. Gregg Breitbart, a Florida attorney with Kaufman Dolowich & Voluck who represented Madison, did not immediately respond to a request for comment.
A Growing Trend
This is just the latest of several cases in which FINRA has sanctioned brokers and advisors related to requests for COVID-19 emergency loans.
For example, FINRA fined and suspended ex-Wells Fargo rep Kenric L. Sexton, whose firm terminated him, saying he “applied for business support from the Small Business Administration when the employee did not have a pre-existing formal business as required.”
Madison was registered with FINRA through multiple firms from March 2001 to December 2017, including Stifel, Barclays Capital, Credit Suisse Securities, Goldman Sachs and Jefferies & Co., according to his report on FINRA’s BrokerCheck website.