March 2025
In December 2024, the Mauriello Law Firm filed a FINRA arbitration claim against broker dealer Capital Investment Group, Inc. based in Morehead City, North Carolina. The claim relates to misconduct alleged against Brett Rutherford, a former securities registered representative (i.e., stockbroker) with Capital, on behalf of a retired San Diego investor.
Two days after this arbitration claim was filed, Rutherford was terminated by Capital Investment Group, and on February 28, 2025 the Financial Industry Regulatory Authority (“FINRA”) barred Rutherford from acting as a stockbroker or affiliating with a securities broker dealer, after finding that he failed to provide documents and information requested by FINRA in connection with its investigation into the circumstances giving rise to the arbitration claim recently filed by Mauriello Law Firm. See https://files.brokercheck.finra.org/individual/individual_4001310.pdf
The Mauriello Law Firm’s client’s account at Capital grossly underperformed the market from 2017 through 2024 and was marked by active trading in individual stocks (79 different stocks during the life of the account from 2017 to 2024) with little to no apparent asset allocation or portfolio management. This approach was unsuccessful. During the same period, Rutherford and Capital Investment Group, Inc. earned substantial commissions from the account which significantly exceeded the well-below-market returns in the account.
Despite the fact that the client had been retired when the account was opened and that her primary objective was income for living expenses, the “investor risk profile” for the account was designated by Rutherford and/or Capital Investment Group as “speculation,” which was inaccurate and inappropriate.
The claim also alleges that Rutherford recommended that the retired client invest $100,000 – over 25% of her retirement savings — in a Panamanian duty-free store investment, which fortunately she declined.
The claim also alleges that Rutherford represented that he would repay the client to make up for the poor account performance. No repayment occurred, but such a representation would violate FINRA Rule 2150(b), which states: “No member or person associated with a member shall guarantee a customer against loss in connection with any securities transaction or in any securities account of such customer.” See https://www.finra.org/rules-guidance/rulebooks/finra-rules/2150.
If you may have suffered investment losses due to negligence or misconduct by Capital Investment Group or any other stockbroker or investment advisor, contact investor rights attorney Thomas Mauriello for a confidential free consultation. Mr. Mauriello has over 30 years of experience representing retirees and other investors in matters involving the securities and financial services industries.