In addition, McMahon currently faces four additional complaints to FINRA - which have yet to be resolved in a settlement or arbitration ruling - from clients he advised while working with National, the regulator’s records show.
McMahon denied any wrongdoing in several of the settled complaints.
Haus - the customer who lost more than half a million dollars with McMahon and others at National - told Reuters that the ordeal made him contemplate suicide.
“I was ashamed,” said the soybean farmer and U.S. military veteran. “I didn’t want to tell anyone I’m losing my life savings.”
Haus settled his complaint against National in November for an undisclosed amount of money. The settlement required him to sign a nondisclosure agreement, and he has since not responded to Reuters’ inquiries.
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In many cases, the firms identified by Reuters continue to operate after years of repeated run-ins with FINRA and other regulators.
Take Los Angeles-based WestPark Capital Inc, where about half of the firm’s 95 brokers have FINRA flags on their records. More than 47 percent of WestPark brokers once worked at firms that were later expelled by FINRA.
Regulators including FINRA and the New Jersey Bureau of Securities have sanctioned WestPark six times in the past 11 years for a variety of alleged violations.
In 2004, FINRA suspended WestPark’s chief executive, Richard Rappaport, for 30 days from his management role and fined him and the firm $50,000 in response to allegations that WestPark omitted critical information from investment research reports and lacked supervisory controls.