FINRA Arbitration Filed Against Financial Advisor Michael Clifford Graham (CRD# 3263494) for Unsuitable Investment Recommendations
If you invested with broker Michael C. Graham (CRD# 3263494) of LPL Financial LLC in El Paso, Texas, you may be eligible to recover your investment losses through FINRA arbitration. A recent claim alleges that private security investments recommended by Graham in 2023 were unsuitable for the customer’s investment objectives and risk tolerance. Additionally, the claim alleges that Graham engaged in securities transactions away from his firm, a practice known as “selling away.”
Our investment fraud attorneys are investigating claims against Michael C. Graham and can help you understand your legal options for recovery. Contact us today for a free consultation to determine if you might be entitled to compensation for your investment losses.
Key Facts About the Michael C. Graham FINRA Arbitration Case
According to FINRA BrokerCheck records updated as of March 7, 2025, Michael Clifford Graham is currently facing a significant customer dispute that was filed on January 13, 2025. The pending FINRA arbitration (Case #25-00075) involves serious allegations:
- Unsuitable investment recommendations that did not align with the customer’s investment objectives and risk tolerance
- Selling away (conducting private securities transactions without proper disclosure to and approval from his firm)
- Potential damages of $276,200.00
The investments at the center of this dispute are private securities purchased in 2023 while Graham was registered with LPL Financial LLC (CRD# 6413). This type of misconduct can leave investors with substantial losses and limited options for recovery outside of formal legal proceedings.
Who is Michael C. Graham? Background and Employment History
Michael C. Graham is currently employed as a Registered Representative at LPL Financial LLC in El Paso, TX, where he has been registered since April 24, 2019. His office is located at:
LPL Financial LLC
201 E Main St, Suite 210
El Paso, TX 79901
Prior to his current position, Graham’s employment history includes:
- Principal Securities, Inc. (CRD# 1137) – January 2012 to May 2019
- Principal Life Insurance Co. – January 2012 to April 2019
- Securian Financial Services, Inc. (CRD# 15296) – November 1999 to January 2012
Graham also operates under several business names:
- Graham Capital Strategies, LLC (since June 2017)
- Pivot Wealth Management, LLC (since May 19, 2023)
- Pivot Legal and Consulting, PLLC (since October 31, 2023)
According to FINRA records, Graham holds the following securities licenses:
- Series 24 (General Securities Principal) – obtained March 10, 2003
- Series 51 (Municipal Fund Securities Principal) – obtained March 28, 2017
- Series 7 (General Securities Representative) – obtained November 19, 2002
- Series 6 (Investment Company Products/Variable Contracts Representative) – obtained November 4, 1999
- Series 65 (Uniform Investment Adviser Law) – obtained July 11, 2001
- Series 63 (Uniform Securities Agent State Law) – obtained February 5, 2000
Graham is currently registered in 14 states and territories, including:
- Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Indiana, Iowa, New Mexico, New York, Pennsylvania, Puerto Rico, and Texas
Understanding Private Securities Investment Risks
Private securities, like those allegedly recommended by Michael C. Graham, often appeal to investors seeking higher returns than traditional investments. However, they carry significant risks that may not be fully disclosed by financial advisors. Investors need to understand these risks:
1. Limited Regulatory Oversight
Private securities transactions typically involve investments not registered with the SEC, meaning they lack the same level of regulatory scrutiny as publicly traded securities. This reduced oversight can increase the risk of fraud or misrepresentation.
2. Liquidity Constraints
Private securities are generally illiquid, meaning investors cannot easily sell their holdings if they need access to their money. Some private investments have lockup periods of several years, forcing investors to hold positions even as values decline.
3. Valuation Challenges
Unlike publicly traded investments with transparent market prices, private securities may be difficult to value accurately. This lack of price transparency can mask performance issues and complicate investment decisions.
4. Higher Fees and Expenses
Private investments often carry significantly higher fees than traditional investments, including upfront sales charges, management fees, and performance fees that can substantially erode returns over time.
5. Concentration Risk
Overconcentration in private securities can dramatically increase portfolio risk, as these investments often lack diversification and may be tied to specific sectors or companies.
Red Flags in Michael C. Graham’s Investment Recommendations
Financial advisors like Michael C. Graham have a legal and regulatory obligation to recommend only suitable investments that align with their clients’ financial objectives, risk tolerance, and investment timeline. Based on our experience investigating similar cases, potential signs of unsuitable investment recommendations include:
- Excessive concentration in high-risk private securities
- Lack of proper diversification across investment types and asset classes
- Inadequate disclosure of risks, fees, and potential conflicts of interest
- Recommendations that contradict stated investment objectives and risk tolerance
- Circumventing firm supervision by selling investments not approved by the brokerage firm
- High-pressure sales tactics emphasizing returns without explaining risks
What Is “Selling Away” and Why Is It Problematic?
The current arbitration claim against Michael C. Graham specifically alleges that he engaged in “selling away,” a serious violation of securities regulations. Selling away occurs when a broker sells investments to clients without properly disclosing these transactions to their employing brokerage firm.
FINRA Rule 3280 prohibits brokers from participating in private securities transactions without prior written notice to their firm. This rule exists to protect investors by ensuring that all investment recommendations undergo proper supervision and compliance review.
When a broker like Graham allegedly engages in selling away:
- Investors lose the protection of the brokerage firm’s due diligence and compliance oversight
- Investments may not be suitable for the client’s objectives and risk tolerance
- Transactions may involve high-risk or fraudulent investments that would not pass the firm’s review
- Brokers may be motivated by higher commissions or fees than those available through approved products
This practice can leave investors with substantial losses and complicated recovery options, as the brokerage firm may attempt to deny responsibility for transactions they were unaware of.
Michael C. Graham’s History of Customer Disputes and Financial Issues
The current FINRA arbitration is not Graham’s first customer dispute. According to BrokerCheck records, he has previously been involved in customer complaint issues:
Prior Customer Dispute – Settled (2005-2006)
Graham was previously named in a customer complaint when he was affiliated with Securian Financial Services, Inc. The complaint alleged:
- Failure to liquidate variable annuity sub-accounts as instructed
- Damages requested: $13,000.00
This complaint was settled for $10,223.65 on May 10, 2006, with Graham personally contributing the entire settlement amount. According to Graham’s statement, “Due to misunderstanding between rep and client, liquidation was delayed by approximately 1 month. Client’s accounts were credited for loss in value due to delay.”
Tax Liens and Judgments
Graham currently has multiple unsatisfied tax liens filed against him, which might raise additional concerns about his financial management capabilities:
- Internal Revenue Service – $563,677.48 (filed July 17, 2023 for tax years 2017 & 2018)
- Internal Revenue Service – $35,047.24 (filed July 20, 2023 for tax year 2015)
- State of New Mexico – $26,944.29 (filed July 25, 2023 for tax years 2013-2016)
- State of New Mexico – $24,202.07 (filed July 25, 2023 for tax years 2009-2016)
These outstanding tax obligations total more than $649,871.08 and may indicate significant financial pressure that could potentially affect business decisions.
How Broker Misconduct Leads to Investor Losses in Private Securities Cases
In cases like the pending arbitration against Michael C. Graham, several forms of potential broker misconduct can contribute to investor losses:
Unsuitable Recommendations
Under FINRA Rule 2111, brokers must have a reasonable basis for believing that a recommended investment is suitable for a client based on their investment profile. Recommending high-risk private securities to conservative investors or overconcentrating portfolios in illiquid investments may violate this suitability standard.
Selling Away / Private Securities Transactions
FINRA Rule 3280 requires brokers to provide written notice to their firms before participating in any private securities transaction. Failing to do so deprives investors of important supervisory protections designed to prevent fraud and unsuitable recommendations.
Misrepresentation and Omission
Some brokers misrepresent private securities as “safe” or “guaranteed” investments while downplaying risks. Others may omit crucial information about liquidity constraints, fee structures, or conflicts of interest that would impact an investor’s decision-making process.
Breach of Fiduciary Duty
Investment advisers owe their clients a fiduciary duty to act in their best interests. This includes providing complete and accurate information, avoiding conflicts of interest, and recommending suitable investments.
Legal Options for Recovering Investment Losses from Michael C. Graham
If you’ve suffered losses from private securities investments recommended by Michael C. Graham, you have several potential avenues for recovery:
1. FINRA Arbitration
The most common method for resolving investment disputes is through FINRA arbitration, which is typically faster and less expensive than court litigation. FINRA arbitration provides a forum where investors can seek recovery of losses caused by broker misconduct.
The current FINRA arbitration case against Michael C. Graham (Case #25-00075) demonstrates this process in action. The case was filed on January 13, 2025, and received by FINRA on January 15, 2025. It remains pending as of March 2025.
2. Brokerage Firm Liability
Brokerage firms have a duty to supervise their brokers and may be held liable for failing to prevent unsuitable recommendations or other misconduct. In the Michael C. Graham case, this could potentially involve:
- LPL Financial LLC (CRD# 6413) – Graham’s current employer since April 2019
Even in selling away cases, brokerage firms may be held liable if they failed to adequately supervise their representatives or ignored red flags that should have alerted them to problematic behavior.
3. Regulatory Complaints
Filing complaints with FINRA, the SEC, or state securities regulators can initiate investigations that may lead to disciplinary actions against the broker and potential restitution for affected investors.
Understanding the FINRA Arbitration Process for Private Securities Disputes
If you’re considering filing a FINRA arbitration claim to recover losses from investments recommended by Michael C. Graham, here’s what you can expect:
1. Initial Consultation with a Securities Attorney
A specialized investment fraud attorney will review your account statements, communications with your broker, and other relevant documents to assess whether you have a viable claim.
2. Statement of Claim Filing
Your attorney will prepare and file a Statement of Claim outlining the facts of your case, the alleged misconduct, and the damages sought. This document initiates the FINRA arbitration process.
3. Respondent’s Answer
The broker and brokerage firm will file an Answer responding to your allegations, typically denying wrongdoing and presenting their defenses.
4. Arbitrator Selection
FINRA will provide a list of potential arbitrators, and both sides will rank and strike names to select the arbitration panel that will hear the case.
5. Discovery Phase
Both parties exchange relevant documents and information. In cases involving private securities, this often includes subscription agreements, offering documents, communications, and internal compliance records.
6. Arbitration Hearing
Similar to a simplified trial, the hearing allows both sides to present evidence, testimony, and arguments before the arbitration panel. Most hearings last 3-5 days depending on complexity.
7. Award Decision
The arbitrators will issue a binding decision, typically within 30 days of the hearing. If successful, you may recover some or all of your investment losses, plus interest and potentially costs.
Warning Signs That Should Have Alerted Investors to Potential Problems
Investors working with Michael C. Graham or any financial advisor should be vigilant for these warning signs of potential misconduct regarding private securities investments:
- Investments not listed on your brokerage account statements (a key indicator of selling away)
- Promises of guaranteed returns or “risk-free” investments
- Significantly higher yields than comparable investments without explanation of additional risks
- Requests to make checks payable to entities other than the brokerage firm
- Reluctance to provide written information about recommended investments
- Pressure to make quick decisions without time for due diligence
- Incomplete or confusing explanations about how the investment works
- Discouraging questions or independent research about the investment
Steps to Take If You Invested With Michael C. Graham
If you invested with Michael C. Graham at LPL Financial or previous firms and experienced losses in private securities or other investments, consider taking these immediate steps:
- Gather all documentation related to your investments, including account statements, trade confirmations, correspondence, marketing materials, and notes from conversations
- Do not communicate further with Graham or the brokerage firm about potential claims without legal representation
- Consult with a securities attorney experienced in FINRA arbitration to evaluate your potential claims
- Act promptly to preserve your legal rights, as statutes of limitation may limit the time you have to file a claim
- Report concerns to FINRA or your state securities regulator if you believe misconduct occurred
Statute of Limitations for Investment Claims Against Michael C. Graham
It’s crucial to act promptly if you believe you’ve been harmed by unsuitable investment recommendations from Michael C. Graham. Most investment fraud claims are subject to various statutes of limitations:
- FINRA arbitration claims typically must be filed within 6 years of the event giving rise to the claim
- Federal securities law claims generally have a 1-2 year statute of limitations
- State securities law claims vary by state, typically ranging from 2-5 years
- Common law claims like breach of fiduciary duty vary by state, typically 3-6 years
Since the private securities investments at issue in the current case against Michael C. Graham were made in 2023, the window for filing claims remains open for now, but will eventually close. Don’t delay in seeking legal advice if you believe you have a claim.
Free Consultation for Michael C. Graham Investors
Our investment fraud attorneys are currently investigating claims related to Michael C. Graham and private securities investments that resulted in losses. We offer:
- Free, confidential case evaluations with experienced securities attorneys
- No recovery, no fee representation – you pay nothing unless we recover money for you
- Experienced FINRA arbitration counsel with a track record of successful recoveries
- Comprehensive analysis of your investment losses and potential claims
Contact us today to discuss your potential claim against Michael C. Graham and explore your options for recovering investment losses.
Related Investment Fraud Investigations
Investors who worked with Michael C. Graham may also want to be aware of other potential investment concerns our firm is investigating:
- Private placement offerings with liquidity restrictions and high fees
- Alternative investments marketed as providing both high yields and safety
- Structured products with complex features that mask risks and costs
- Variable annuities with inappropriate riders or surrender periods
- Limited partnerships with high commissions and opaque fee structures
How to Protect Yourself From Similar Investment Fraud
While you can’t undo past investment losses, you can take steps to protect yourself from similar situations in the future:
- Research your financial advisor through FINRA BrokerCheck (brokercheck.finra.org) to review their employment history, credentials, and any disclosures or customer complaints
- Ask direct questions about risks, fees, liquidity constraints, and how your advisor is compensated for recommended investments
- Request written information about any investment before committing funds, and take time to review it carefully
- Maintain a diverse portfolio across different asset classes, sectors, and security types to reduce risk
- Be skeptical of investments that promise returns significantly higher than comparable alternatives without additional risk
- Monitor your accounts regularly and question any unauthorized or unexpected transactions
- Keep records of all communications with your financial advisor, including emails, letters, and notes from conversations
Important Disclaimer
The information in this article regarding Michael C. Graham (CRD# 3263494) is based on allegations made in a pending FINRA arbitration and information from public records. The claims against Michael C. Graham have not been proven, and the presence of disclosures on BrokerCheck does not necessarily indicate wrongdoing.
All investors should conduct their own research and due diligence before making any investment decisions or legal choices. This article is for informational purposes only and does not constitute legal or investment advice.
Last Updated: March 7, 2025
