Posing as a broker, Maryland insurance agent grabs clients’ savings

investmentnews.com:

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