Brokerage Firm Alert: Our Investment Fraud Attorneys Are Investigating Calton & Associates, Inc.
Did You Lose Money Because of Calton & Associates? Are You Aware of Complaints and Fines Against Calton & Associates?
Updated on: December 11, 2023
Calton & Associates, Inc. (“Calton & Associates”) (CRD # 20999) is a broker-dealer and has been the subject of at least twelve (12) complaints filed by regulatory organizations like FINRA and many more by investors like yourself. At Patil Law, we have investigated Calton & Associates, its regulatory complaints and fines, and its customer complaints. If you’ve invested your hard-earned money with Calton & Associates, you should be very concerned about any regulatory actions, regulatory fines, or customer complaints against your brokerage firm.
Our team of attorneys specialize in representing investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors. As an investor, you may be entitled to compensation for losses accrued due to mismanagement of your investments.
If you believe you have a claim against Calton & Associates, you should strongly consider hiring an investment fraud lawyer and not wait until it’s too late to file a claim. Reach out to our legal team via the secure and private online form or call our firm directly toll-free at 1-800-950-6553 for a free consultation so that we can discuss your case and see what we can do to help you get the compensation you need and deserve. We do not charge anything for the ability to discuss your matter and evaluate your potential case.
Jump to Topic
Do I Have an Investment Fraud Case Against Calton & Associates?
How To File a Claim Against Calton & Associates To Get Your Money Back
Client Complaints – Is Your Financial Advisor on This List?
Did Misconduct By a Calton & Associates Advisor Impact Your Investments?
Calton & Associates Has Many Regulatory Complaints and Fines
A Closer Look Into Calton & Associates’ Regulatory Issues
Next Steps and Free Consultation with Our Legal Team
Do I Have an Investment Fraud Case Against Calton & Associates?
✅ YES, if you’ve experienced financial losses due to the actions or misconduct of Calton & Associate or its staff, you have the right to pursue legal action against them. You can sue Calton & Associates but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding.
FINRA arbitration proceedings are generally private proceedings that can last anywhere from a few months to approximately a year. Our attorneys have personal experience in representing clients in FINRA arbitration proceedings and know very well how you can not only sue Calton & Associates in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a case against Calton & Associates is to reach out to our legal team at Patil Law via the secure and private online form or call us toll-free at 1-800-950-6553 for a complimentary consultation.
Who is Calton & Associates?
Calton & Associates (CRD # 20999) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors. As a registered broker-dealer, Calton & Associates is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests. A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.
How To File A Claim Against Calton & Associates To Get Your Money Back
If you have questions about Calton & Associates, its advisors, or the management or performance of your accounts, please contact our legal team at Patil Law via the secure and private online form or call us toll-free at 1-800-950-6553 for a free and complimentary initial consultation. Our attorneys have experience handling well over a thousand securities arbitration claims, and our law firm has successfully recovered over $25 million for our clients to date.
We understand the stress that comes along with realizing that your financial advisor or brokerage firm has made poor decisions with your money. We can help you, as we have helped hundreds of other clients in the past.
Client Complaints – Is Your Financial Advisor on This List?
There have been scores of customer complaints filed against Calton & Associates stockbrokers and investment advisors over the years. Many of these complaints deal with financial advisor misconduct, poor or unsuitable investment recommendations, failure by these brokerage firms to supervise their employees (the financial advisors), and general fraud against consumers. We have launched many investigations of current and former Calton & Associates advisors:
Did Misconduct By a Calton & Associates Advisor Impact Your Investments?
If you have lost money investing with any of these Calton & Associates advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call our legal team at Patil Law toll-free at 1-800-950-6553 or reach out to us via the secure and private online form for a free initial consultation.
Calton & Associates Has Many Regulatory Complaints and Fines
There have been approximately twelve (12) state and self-regulatory body disclosure events against Calton & Associates; that is, final and formal proceedings initiated by a regulatory authority like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) for a violation(s) of investment-related rules or regulations. In addition, there have been countless customer complaints filed against Calton & Associates for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
Our legal team at Patil Law has reported and written about these regulatory problems and customer complaints over many years. A few of the notable FINRA Sanctions for its Supervisory Failures are below.
A Closer Look Into Calton & Associates’ Regulatory Issues.
Calton & Associates has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors. Details of twelve (12) regulatory issues are listed below:
Fined $250,000 for Alleged Supervisory Failures in Meeting Suitability Obligations for Non-Traditional and Volatility-Linked ETPs. (AWC No. 2018060466201)
Overview from FINRA’s Disciplinary Office:
During the period of February 2014 to February 2020, Calton failed to establish and maintain a supervisory system reasonably designed to achieve compliance with the firm’s suitability obligations in connection with sales of non-traditional and volatility-linked exchange traded products (ETPs). Non-traditional and volatility-linked ETPs are complex products intended to be held for short periods of time as part of a trading strategy rather than as buy-and-hold investments. Although the firm was aware of the complex nature of the products, Calton permitted its representatives to offer the products to retail customers without a reasonable supervisory system to properly understand the products’ features and risks and review and monitor transactions.
Consequently, Calton representatives recommended non-traditional and volatility-linked ETPs to retail customers without understanding the products were intended for short-term trading rather than as buy-and- hold investments, and the firm’s customers held the products for longer periods of time, resulting in losses.
Based on the foregoing, Calton violated NASD Rule 3010(a) and FINRA Rules 2111, 3110(a) and 2010.
In addition, during the period from January 1, 2014 to June 21, 2018, Calton failed to offer retail customers educational materials prior to their first purchases of collateralized mortgage obligations (CMOs), in violation of FINRA Rules 2216(b)(2) and 2010, and it failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with FINRA Rule 2216(b)(2), in violation of NASD Rule 3010 and FINRA Rules 3110 and 2010.
Further, the firm unreasonably assigned an individual to supervise a registered representative despite the presence of a conflict of interest, in violation of FINRA Rules 3110(b)(6) and 2010, and it allowed a non-registered person to accept and enter securities orders, in violation of NASD Rule 1031 and FINRA Rules 1210, 3110, and 2010.
Fined $18,000 for Allegedly Misreporting Customer Allocation Transactions as TRACE-eligible Securitized Products Rather Than 95 Block Transactions (AWC No. 2019062882101)
Overview from FINRA’s Disciplinary Office:
Between January 1, 2019 and October 31, 2019 (the “Review Period”), Calton violated FINRA Rule 6730(a) by reporting to TRACE 1,329 customer allocation transactions in TRACE-eligible Securitized Products that should have been reported as 95 block transactions. Calton also violated FINRA Rule 6730(c) by failing to report to TRACE the correct capacity and/or commission for 391 transactions in TRACE-eligible securities.
Additionally, Calton failed to establish and maintain a system, including written supervisory procedures (“WSPs”), to supervise the activities of each associated person that was reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules, specifically those concerning the Firm’s compliance with TRACE reporting rules in violation of FINRA Rules 3110(a), (b), and 2010.
Fined $5,000 for Alleged Noncompliance With Reporting Requirements for TRACE-eligible Securitized Products Transactions in the Trade Reporting and Compliance Engine (TRACE) (AWC No. 2015046491801)
Overview from FINRA’s Disciplinary Office:
In Review No. 20150464918, the TRACE Agency/SP Team of the Department of Market Regulation reviewed the firm’s compliance with the requirements to timely report to the Trade Reporting and Compliance Engine (“TRACE”) transactions in TRACE-eligible Securitized Products (”SP”) during the period ofApril 1, 2C 15, through June 30, 2015 (the “review period”). As detailed below, the firm violated FINRA Rule 6730(a) by failing to report 99 transactions within the time permitted by the rule.
Fined for Alleged Supervisory Failures (AWC No. 2010024109201)
Overview from FINRA’s Disciplinary Office:
On or about April 21, 2010 through April 27, 2010 (the “review period”), R.M. Duncan Securities, Inc. (“DCAN”), acting through its registered representatives Randall M. Duncan (“Duncan”) and Stephen B. Murchison (“Murchison”), (collectively, “DCAN Respondents”) executed four transactions in bonds issued by the Maryland Economic Development Corp. (“MEDCO”).
The specific bonds are referred to in this Complaint as the ? Ravenwood bonds” and were identified as “MARYLAND ST ECONOMIC DEV CORP SR-RAVENWOOD HEALTHCARE FAC-A BONDS CUSIP 57420UAK1.” The Ravenwood bonds had a coupon interest rate of 8.75 percent and a maturity date of August 1, 2027. By January 2010, the Ravenwood bonds were in default insofar as bondholders were no longer receiving full interest payments from Ravenwood.
The DCAN Respondents sold Ravenwood bonds to its customers at prices that were approximately 60 percent higher than the prevailing market price.
Specifically, the DCAN Respondents purchased $180,000 par value2 Ravenwood bonds at the inflated price of 80 from customer WS. WS is now deceased, but at the time of the review period, WS was a prominent member of the community in Fayetteville, Arkansas and had assets valued between $50 million and $150 million.
The DCAN Respondents then solicited, via telephone, three elderly customers during the review period to purchase a total of $215,000 par value Ravenwood bonds at prices ranging from 82.375 to 82.75. The customers solicited by the DCAN Respondents were RH (then 68 years old), SP (then 84 years old), and WR (then 85 years old). At the time, the prevailing market price for the Ravenwood bonds was 51.216.
The DCAN Respondents told customers that they would receive an 11 percent tax free yield on the Ravenwood bond interest payments, despite the fact that the bonds were in default during the review period and were not paying full interest.
The DCAN Respondents also sold $20,000 par value Ravenwood bonds at 80 to Calton & Associates, Inc. (“CALT”), through CALT’s registered representative Kenneth R. Harter (“Harter”) (collectively, “CALT Respondents”). Harter, however, did not review the prevailing market price for the Ravenwood bonds before he bought them from DCAN at 80.
As a result of their solicitation of customers and sale to the CALT Respondents, the DCAN Respondents needed to acquire more Ravenwood bonds – $55,000 par value – than they had purchased from customer WS.
To fill this shortfall, DCAN purchased approximately $55,000 par value Ravenwood bonds at 80 from Eminence Partners LP (“Eminence”), Duncan’s investment advisory company.
The DCAN Respondents added a 2.9 percent to 3.44 percent markup and sold the Ravenwood bonds that it had purchased from WS and from Eminence to customers RH, SP, and WR at prices ranging from 82.375 through 82.75. The prices to the three customers ranged from 60 to 62 percent away from the prevailing market price, which was 51.216. As a result, customers RH, SP, and WR paid prices that were unfair and are owed $64,039.94 in restitution plus interest.
The CALT Respondents solicited, via telephone, customer GR to purchase the Ravenwood bonds. When GR agreed, the CALT Respondents added a 3 percent markup and sold the Ravenwood bonds that it purchased from DCAN to customer GR at 82.40. This price was 60 percent away from the prevailing market price of 51.216. As a result, customer GR paid a price that was unfair and is owed $6,031.94 in restitution plus interest.
By charging customers prices that were not fair or reasonable in municipal bond transactions, the DCAN Respondents and CALT Respondents willfully violated Municipal Securities Rulemaking Board (“MSRB”) Rules G-17 and G-30.
By engaging in transactions, practices, or course of business that operated or would operate as a fraud or deceit upon the purchaser, the DCAN Respondents and CALT Respondents violated Section 17(a) of the Securities Act of 1933, and as a result violated MSRB Rule G-17.
By failing to deal fairly with all persons and engaging in deceptive, dishonest, and unfair practices, the DCAN Respondents and CALT Respondents also willfully violated MSRB Rule G-17.
DCAN also failed to establish and maintain a system, including the establishment and maintenance of written procedures as was required, to supervise the municipal securities activities of its registered and associated persons that was reasonably designed to achieve compliance with applicable securities laws and regulations, and with MSRB rules concerning municipal bond fair pricing in willful violation of MSRB Rule G-27.
Fined $305,044.61 for Allegedly Breaching Fiduciary Duty And Incomplete Disclosures (Docket/Case Number: 3-19073)
Overview from FINRA’s Disciplinary Office:
AI Release 40-5170 / March 11, 2019: the Securities and Exchange Commission Deems it appropriate and in the public interest that public administrative and cease-and- desist proceedings be instituted against Calton & Associates, Inc. (“Respondent”). On the basis of this order and respondent’s offer, the Commission finds that these proceedings arise out of breaches of fiduciary duty and inadequate disclosures by the respondent in connection with its mutual fund share class selection practices and the fees it received. At times during the relevant period, respondent purchased, recommended, or held for advisory clients mutual fund share classes that charged 12B-1 fees instead of lower-cost share classes of the same funds for which the clients were eligible. Respondent received 12B-1 fees in connection with these investments. Respondent failed to disclose in its form ADV or otherwise the conflicts of interest related to (a) its receipt of 12B-1 fees, and/or (b) its selection of mutual fund share classes that pay such fees. During the relevant period, respondent received 12B-1 fees for advising clients to invest in or hold such mutual fund share classes. As a result of the conduct, respondent willfully violated sections 206(2) and 207 of the advisers act.
Fined $5,000 for Alleged Supervisory Failures In Getting Approval For Seminar Ads And Sales Literature, Submitting Seminar Ads And Sales On Time, Keeping Copies Of Seminar Ads And Sales Literature, And Effectively Oversee Violations Of Securities Regulations (Docket/Case Number: 0363-S-11/07)
Overview from FINRA’s Disciplinary Office:
On 1/14/2009, the office executed a stipulation and consent agreement whereby Calton neither admitted nor denied but consented to the entry of findings by the office as follows: 1.) failure to approve seminar ads and sales literature before its first use or submission to NASD’s Advertising Regulation Dep’t, 2.) failure to submit seminar ads and sales literature referencing variable annuities and CMO’s to NASD’s Advertising Regulation Dep’t within 10 business days of first use or publication, 3.) failure to retain seminar ads and sales literature, and; 4.) internal inspections were not reasonably designed to assist in detecting and preventing violations of applicable securities regulations, including the use of unapproved advertising and the use of a private email account by one of its registered representatives to transact securities business.
Fined $5,000 for Alleged Supervisory Failures Allowing Their Representative To Engage In Securities Activities Prior Resignation (Docket/Case Number: 1912-S-7/93)
Overview from FINRA’s Disciplinary Office:
In February 1993, Calton and Associates notified the State that one of its representatives, John W. Wisdom, conducted securities business prior to resignation. Wisdom was granted registration on 5-13-93.
Fined $1,500 for Allegedly Engaging In Illegal Securities Sales and Neglecting Duty to Oversee an Agent (Docket/Case Number: 2684-S-6/98)
Overview from FINRA’s Disciplinary Office:
On December 9, 1998, the Department issued an administrative complaint against respondents TRP Advisory Group, Inc. (“TRP”), Aragon Financial Services Corporation (“Aragon”), Calton and Associates, Inc. (“Calton”), Terrance Pipenhagen (“Pipenhagen”), Scott Michael Tober (“Tober”), and Dwayne Calton. The Department alleges that: TRP operated as a broker-dealer without lawful registration, Aragon sold unregistered securities and made unsuitable recommendations, Calton sold unregistered securities and failed to properly supervise an agent, Pipenhagen sold unregistered securities, sold securities without the benefit of proper registration, and made unsuitable recommendations, Tober sold securities without being properly registered with the department, and Dwayne Calton offered for sale or sold unregistered securities. The respondents have 21 days to request a hearing to contest the department allegations.
Fined $2,500 for Alleged Supervisory Failures in Filing Form MSRG Rule G-37 On Time (Docket/Case Number: C07980038)
Overview from FINRA’s Disciplinary Office:
Failure to file form MSRG Rule G-37 in a timely manner.
Fined $5,000 for Allegedly Operating a Florida Branch Without Proper Registration (Docket/Case Number: 2657-S-4/98)
Overview from FINRA’s Disciplinary Office:
The Florida Department of Banking and Finance alleges that Calton & Associates, Inc. conducted securities business from a branch office location in Florida without benefit of lawful registration.
Fined $250 for Alleged Supervisory Failures In Filing MSRB Form G-37 On Time (Docket/Case Number: C07960101)
Overview from FINRA’s Disciplinary Office:
Failure to file MSRB Form G-37 in a timely manner.
Fined $5,000 for Alleged Supervisory Failures In Properly Overseeing Its Salesman (Docket/Case Number: S-3122-I)
Overview from FINRA’s Disciplinary Office:
Calton & Associates Inc. failed to reasonably supervise its salesman with the view of preventing violations of the Arizona Securities Act.
Next Steps and Free Consultation with Our Legal Team
If you have questions about Calton & Associates, its advisors, or the management or performance of your accounts, please contact our team at Patil Law toll-free at 1-800-950-6553 for a free initial consultation. Or please reach out to us through our secure and private contact form and we will call you back quickly to discuss your case.
Our attorneys have experience handling well over a thousand securities arbitration claims, and our law firm has successfully recovered over $25 million for our clients to date. We understand the stress that comes along with realizing that your financial advisor or brokerage firm has made poor decisions with your money.
We can help you, as we have helped hundreds of other clients in the past. We are happy to serve you as well as to provide you with a custom report of your advisor’s and your brokerage firm’s complaints.