Financial Industry Regulatory Authority (FINRA) has barred Edward (Ed) Earl Matthes from working as a broker or even associating in any capacity with a broker-dealer firm. FINRA’s BrokerCheck reports on the events that led to Matthes’ disbarment, including a 20-year history as a broker, generating multiple disclosed events—five regulatory, one criminal, one investigation, one civil, 15 customer disputes, and two terminations.
In March 2006, Matthes was accused of the unsuitable sale of a variable annuity to a Missouri resident. He allegedly invested between 85 and 90 percent of a resident’s liquid net assets into a variable annuity. The State of Missouri’s Office of Secretary of State, Securities Division, initiated regulatory action, seeking disgorgement of Matthes’ commissions, as well as the broker’s two-month suspension from selling variable annuities. Matthes was further sanctioned with a monetary penalty of $7,308.
Matthes again faced regulatory sanctions in March 2019 after allegedly failing to fulfill FINRA’s request for documents and information related to an investigation prompted by an outside tip. Refusing to comply with this request constituted a violation of FINRA Rule 8210 and 2010, resulting in the broker’s being permanently barred. Matthes worked for Mutual of Omaha Investment Services at this time.
In May 2019, Matthes was accused of misappropriating over one million dollars from insurance clients. He allegedly created fake investments and account summary forms. Wisconsin brought regulatory action against Matthes, seeking disbarment and a cease-and-desist order. The sanctions were so ordered that same month.
The United States Securities and Exchange Commission (SEC) caught up with Matthes on January 28, 2020, after he allegedly defrauded 26 clients in the amount of $2.4 million. The SEC’s complaint indicates that Matthes persuaded clients to invest in a fictitious investment that the broker described as safe and one that would earn a guaranteed minimum yield of four percent annually. The complaint further alleges that Matthes stole $1.4 million, as well as an additional $1 million via unauthorized sales and withdrawals from clients’ variable annuities. The broker then proceeded to hide the fraud by creating fictitious account statements. He paid around $170,000 in Ponzi-like payments to clients. The SEC initiated actions aimed at recovering civil and administrative penalties and fines, disgorgement, and an order of permanent injunction. Matthes was permanently barred.
The SEC initiated regulatory action against Matthes on February 3, 2020, resulting in a permanent bar that would prevent the broker from future violations of the Securities Exchange Act. As a result of these sanctions, Matthes is barred from acting as a broker, investment adviser, dealer, municipal advisor, municipal securities dealer, transfer agent, or nationally recognized statistical rating organization (NRSRO). He is also specifically barred from engaging in the trade or inducing the sale or purchase of any penny stock.
Matthes’ most recent event, as indicated by BrokerCheck, centers around a criminal charge that is still pending. The broker pled guilty to three counts of felony wire fraud. He was charged on November 25, 2020 in the Eastern District of Wisconsin. He is also under investigation by the Federal Bureau of Investigation for alleged misappropriation of funds. This investigation is still pending.
According to BrokerCheck, 15 customer disputes against Matthes have been settled for allegations reported between February 2006 and August 2019. These actions resulted in settlements as high as $569,549.16.
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FRS is a governmental body. FRS retained the services of Peter Mougey of the LP law firm in a multimillion dollar lawsuit involving extremely complex issues. Mr. Mougey quickly mastered the issues and gave advice that was vital in bringing about a successful resolution. Two of the most important features of Mr. Mougey’s representation was his understanding of government and his ability to communicate complicated legal concepts to a 10-member board of trustees in language that was easily understood by all. I did not know Mr. Mougey before FRS retained him and, fortunately, have not experienced circumstances where the system would need his services again. However, if needed, I would have no hesitation in retaining his services again. Please let me know if you need any additional information or assistance. Steven S.
Edison's famous adage can't ever be ignored of course: 1 part inspiration and 99 parts perspiration. However the two attitudes must be present indissolubly--both are essential--if results are to be obtained. Peter Mougey’s group is aware of such a requirement, they work very hard at the latter, and the former comes easily to them, a rare combination anywhere to be found indeed. Raphael B.
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