A former insurance agent who posed as a securities broker - without the appropriate licenses - has become the target of the Maryland Securities Commissioner after he took $100,000 from elderly customers and never returned it to them.
The insurance agent at the heart of the matter, Johnathan Munoz with the firm JM Financial Services, was never registered to sell securities but in late 2020 promised two customers in their seventies he would turn $100,000 earmarked for a separate brokerage account into $325,000 in little over a year, according to a July cease and desist order from the Maryland Securities Commissioner.
According to the Maryland order, Munoz allegedly defrauded the customers when he falsely represented to them that he was a stockbroker or financial advisor and offered to manage their investment assets through JM Financial. He also falsely told them he would open a separate securities account for them and manage their money when, in fact, he used their investment funds for his personal benefit, according to the Maryland Securities Commissioner.
Munoz was barred from ever working in the securities industry in Maryland and ordered to pay $115,000 as a civil penalty.
A call to Munoz's phone listed in his online insurance agent history could not be completed because it was not in service. His firm was based in Gaithersburg, Md. according to online insurance agent profiles. He has not been a licensed insurance agent since last November.
InvestmentNews in the past has focused on the confusing nature of the various regulatory regimes under which financial advisors work. Among the most vexing issues facing the financial advice industry is that of advisers who are restricted or barred from selling securities, but continue to hold a license to sell insurance.
"Many of the dangers for investors, sadly, come from industries similar to the retail securities business, and that includes insurance salespeople," said Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services. "Customers should use regulated industries to their advantage and hire career specialists in each area of their lives. Counting on one person to take care of their needs across multiple industries can lead to financial disaster."
"Customers should also work with professionals who are members of organizations with stated high standards, such as CPAs and CFPs," he added.
Munoz was licensed as an insurance producer with the Maryland Insurance Administration from January 2019 to November 2023, when his license expired, according to the Maryland order.
From February 2023 to July, Munoz was affiliated with Park Avenue Securities in a non-registered capacity, and from November 2019 to November 2020, he was affiliated with Mutual of Omaha Investor Services, Inc., also in a non-registered capacity.
According to the Maryland order, Munoz was discharged by Mutual of Omaha’s parent company “for
improper business practices involving submission of an unauthorized insurance application.”
Prior to that, Munoz was affiliated with NY Life Securities in a non-registered capacity from
October 2018 to November 2019.
"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.
Elsewhere, Sanctuary Wealth recently attracted a $225 million team from Edward Jones in Colorado.
The giant hybrid RIA is elevating its appeal to advisors with a curated suite of alternative investment models, offering exposure to private equity, private credit, and real estate.
The $40 billion RIA firm's latest West Coast deal brings a veteran with over 25 years of experience to its legacy division for succession-focused advisors.
Invictus fund managers allegedly kept $10 million in plan assets after removal, setting off a legal fight that raises red flags for wealth firms.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
