Ronald Molo, a former stockbroker with Edward Jones, has been barred by Financial Industry Regulatory Authority (“FINRA”) for failing to respond to a request for information regarding a customer’s allegation that he stole funds from his clients by wiring the funds to a bank account controlled by his wife without her knowledge.
According to the allegations, Ronald Molo stole clients money and put it in his wife’s bank account, telling her it was some sort of personal investment. The customer complaint was settled for $263,119.54 and Molo was barred on January 3, 2022. Molo was a stockbroker for 20 years and drew multiple complaints for misappropriating funds throughout his career as well as other FINRA violations.
The SEC’s Charges Against Ronald Molo
Ronald Molo has been charged by the SEC for stealing approximately $800,000.00 from his clients, with at least one of these clients being an Edward Jones customer. Specifically, between January 2019 and November 2020, the SEC alleges that Molo stole between $250,000 and $300,000 from two of his advisory clients and another $250,000 from a brokerage firm customer. All the clients that he stole from were senior citizens, according to the allegations.
The SEC alleges that Molo convinced his customers to transfer money out of their financial institution accounts for what he claimed would be an investment in tax-free bonds. Instead, these bonds did not exist and the customer funds were being transferred to one of Mr. Molo’s accounts without the investors’ knowledge.
Rather than investing any of these individuals’ money, Molo misused at least $778,000 of the funds for his own personal use but sent $22,000 of their money back to his customers, in Ponzi-like fashion, so it would appear the bonds were accruing interest. Mr. Molo allegedly did this by altering cashier’s checks with white out from his bank, funded with money drawn from his own personal account.
The SEC alleges that Molo used his client’s money for mortgage payments, house renovations, paying his lawyer, and relatives. Molo convinced all three of his customers to make these investments through conversations, with no investments on paper, taking advantage of his long-term relationship with the customers and the trust he had built with them over the years.
Edward Jones failed to discover Molo’s scheme until one of the investors called about a missing interest payment. As an investment adviser representative, Molo owed a fiduciary duty to these clients. Stockbrokers are required to act in the clients’ best interest, and in good faith towards their clients, and to disclose all material facts about their investments and the relationship.
Previous Complaints Against Ronald Molo
Molo’s FINRA BrokerCheck report reveals a history of customer complaints alleging dishonesty. In November of 2019, a client alleged that Molo was making unauthorized trades and failed to provide him relevant information about a policy that was going to be converted. This complaint was settled for $16,000.
Likewise, in 2012 a client filed a complaint stating that Molo suggested she liquidate certain funds in her retirement account and purchase mutual funds for a return of 4% and she could get her money out with no penalty. She states she was not advised about the commission Molo would receive after she made this transfer and had requested $5,274 in damages.