Finra panel: Broker owes former employer $260,000 after allegedly overstating book of business

Jeffrey Matthews Financial Group is clawing back $260,000 in damages from a broker it fired last year after he allegedly misrepresented his book of business, according to the Financial Industry Regulatory Authority Inc. Donald Lee Watson Jr. must make the payment to his former employer due to claims of fraud and unjust enrichment, according to a Finra arbitration document dated Nov. 14. He allegedly told Jeffrey Matthews he produced more than $700,000 in revenue when hired in September 2015, resulting in a $200,000 transition bonus, Finra's BrokerCheck shows. Mr. Watson, who previously worked at Stifel Financial Corp., didn't transition any client assets to the broker-dealer and had presented the firm with a fraudulent spreadsheet of clients, according to allegations made by Jeffrey Mathews on his BrokerCheck profile. The firm discharged him in December. (Related read: Former Morgan Stanley broker barred for unauthorized borrowing from clients) Mr. Watson, who in January registered with investment advisory firm Watson & Co. in Sarasota, Fla., didn't return a phone call seeking comment about the Finra arbitration award and allegations against him. “We think he made material misrepresentations,” said Richard Meisner, an attorney with Jardim, Meisner & Susser who represented Jeffrey Matthews in the arbitration case. He said Mr. Watson overstated both his book of business and the size of an advance he had received from his prior employer in order to get a larger transition payment from Jeffrey Matthews. Brokers typically receive a large cash advance when they're hired, signing a promissory note agreement to pay back the transition bonus on a pro rata basis should they leave before a specified number of years. Mr. Watson has had a long list of employers over the past decade, often spending less than a year at each. He worked at Stifel from May 2015 to September 2015, according to BrokerCheck. Before that, he was employed by Global Private Wealth from January 2015 to March 2015. FirsTrust, where he worked from September 2014 to January 2015, discharged him for alleged disregard for compliance procedures and failing to repay debt owed to the company, BrokerCheck shows. Seaside National Bank and Trust, PNC Financial Services Group, LPL Financial, C.D. Mitchell & Co., Uvest Financial Services Group, Superior Bank and Raymond James Financial Inc. are also among his prior employers since 2007, according to BrokerCheck.