Tuesday, January 7, 2014

Missouri Securities Division Cancels the Registration of Missing Investment Adviser Rep

In late 2013, Missouri Commissioner of Securities ordered the cancellation of Joseph Jackson and J. Andrew Jackson & Co. LLC’s registration.  The company was a Registered Investment Adviser with Jackson registered as its investment adviser representative.  

According to the Missouri Order, in July 2012, a Missouri Resident (“MR”) opened an account with Interactive Brokers LLC, a Missouri registered broker-dealer, through J. Andrew Jackson & Co., LLC.  Jackson was listed as the representative of record on the account.  By August, 2012, Jackson, acting as the registered representative on the account, had lost over $83,000 in MR’s account due to his purchasing of options in MR’s account.  Jackson never discussed purchasing options with MR and MR had no knowledge about how options work.   Jackson told MR that he was attempting to “hit a home-run” with the purchases.  In September 2012, Jackson repaid MR $10,000 and agreed to pay MR $5,000 every other week until the losses were recouped.  MR has been unable to contact Jackson since September 21, 2012.  Jackson is believed to have other Missouri clients.    

Since June of 2013, investigators of the Missouri Securities Division made several attempts to contact Jackson at his last known addresses and phone numbers to no avail.  Thus, pursuant to Section 409.4-408(e) of the Missouri Securities Act,

(e) If the commissioner determines that a registrant or applicant for registration is no longer in existence or has ceased to act as a broker-dealer, agent, investment adviser, or investment adviser representative, or is the subject of an adjudication of incapacity or is subject to the control of a committee, conservator, or guardian, or cannot reasonably be located, a rule adopted or order issued under this act may require the registration be canceled or terminated or the application denied.

Therefore, in the interest of investors and because all means of contacting Jackson had been exhausted, the Commissioner ordered the cancellation of the registrations of both Jackson and J. Andrew Jackson & Co. LLC. 

It remains to be seen whether Jackson will resurface.  If that happens, we will likely see another Enforcement Action concerning his alleged neglect and mishandling of client accounts. 

While this advice is probably obvious to most of our readers, investment adviser reps should always maintain contact with their clients.  Finally, if you receive an inquiry from a State Securities Department or other related agency, contact the attorneys at Cosgrove Law Group, LLC immediately

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