U.S. broker's Facebook misstep leads to fine, suspension

Mon Sep 16, 2013 3:28pm EDT
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By Suzanne Barlyn

(Reuters) - A Facebook post defending a drug company stock has spurred more than a year of headaches for a broker who has been fined and suspended in a case that highlights the perils of running afoul of the securities industry's social media rules.

Charles Matisi's 2012 Facebook post took issue with a Barron's article that cautioned against buying Arena Pharmaceuticals Inc's stock too high, given some of the hurdles it faced to bring a key weight loss drug to market.

First, his firm concluded that he violated its social media policy, and he resigned from his job at MML Investors Services, a Springfield, Massachusetts-based unit of Massachusetts Mutual Life Insurance Co, the firm said.

Then, he had to answer to Wall Street's watchdog, the Financial Industry Regulatory Authority, which slapped him with a $5,000 civil fine and 10-day suspension last week, according to a settlement agreement.

"There's no safer weight loss drug," he had written. Though he did not name the drug in his post, the firm recently won approval for weight-loss drug Belviq.

His remark was "not fair and balanced," FINRA said in the settlement, and omitted key details, including the fact that he and 33 of his customers owned Arena shares.

Matisi, who now works for Park Avenue Securities in Woodbury, New York, a unit of The Guardian Life Insurance Co of America, neither admitted nor denied FINRA's allegations, according to the settlement filing dated September 11.

Matisi declined to comment to Reuters. He denied in a separate public disclosure filing that he violated any company policy. A Massachusetts Mutual spokeswoman said the company "fully cooperated" with FINRA's review of this matter.   Continued...