March, 2025 | Based in Brooklyn, NY
Don’t wait to protect your financial future. If you believe you’ve been affected by questionable investment practices, call 800-950-6553 or complete our online form to schedule your no-obligation case evaluation.
Critical Information About Michael Patrick McNicholas
- Full Name: Michael Patrick McNicholas
- CRD Number: 4199745
- Current Location: Brooklyn, NY
- Current Employer: LPL Financial LLC
- Office Address: Brooklyn, NY
- Registration Status: Currently registered with 1 SRO and licensed in 13 U.S. states and territories
- State Licenses: Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Louisiana, New Jersey, New Mexico, New York, North Carolina, Tennessee
- Experience: In the industry since 2001
- FINRA BrokerCheck: One pending customer dispute as of December 2024
- Previous Employers: Securities America Advisors, Inc. (2013-2021), Securities America, Inc. (2007-2021), Brookstreet Securities Corporation (2004-2007), First Securities USA, Inc. (2001-2004)
- Ability to Recover Losses: Investors may have arbitration eligibility for claims within applicable statute of limitations
Detailed Investigation: Michael McNicholas and Allegations of Fiduciary Misconduct
Financial advisor Michael Patrick McNicholas, based in Brooklyn, NY and currently working with LPL Financial LLC, is the subject of a pending customer dispute that raises serious concerns about potential breaches of fiduciary duty and questionable handling of client assets. Our securities fraud attorneys are actively investigating this matter to determine if other investors may have been affected by similar conduct.
The allegations against McNicholas involve a particularly troubling scenario that implicates both family dynamics and financial responsibility. According to FINRA BrokerCheck records, McNicholas is facing a customer complaint filed in December 2024 wherein a former client—the ex-husband of a current client—alleges that McNicholas failed to properly address what appears to be a misappropriation of funds intended for the client’s daughter.
The Nature of the Allegations
According to the FINRA disclosure, the complainant alleges that McNicholas’s client (the complainant’s ex-spouse) violated the terms of their marital separation agreement by misappropriating funds that were intended for their daughter. While the allegations do not claim that McNicholas himself took any funds, they specifically suggest that the financial advisor failed to fulfill his professional obligation to notify the daughter about the alleged misappropriation after taking instructions from the account holder (his client) in July 2024.
This type of allegation raises critical questions about a financial advisor’s responsibility when they become aware of potentially improper financial activities, particularly when those activities may involve violations of legal agreements and impact beneficiaries of investment accounts.
Background and Professional History
Michael McNicholas has been in the financial services industry for approximately 24 years, having obtained his General Securities Representative license (Series 7) in May 2001. He later acquired his Uniform Investment Adviser Law Examination qualification (Series 65) in April 2013, allowing him to provide investment advisory services.
McNicholas’s employment history shows a pattern of relatively long-term affiliations with his broker-dealers:
- October 2021 to Present: LPL Financial LLC (Brooklyn, NY)
- April 2013 to October 2021: Securities America Advisors, Inc. (Santa Fe, NM)
- July 2007 to October 2021: Securities America, Inc. (Santa Fe, NM)
- March 2004 to July 2007: Brookstreet Securities Corporation (Chico, CA)
- May 2001 to June 2004: First Securities USA, Inc. (Irvine, CA)
It’s worth noting that McNicholas is currently registered to do business in 13 states, suggesting a relatively broad client base. His registrations were most recently updated in June 2024 when he received approval as an agent and investment adviser representative in New York.
Red Flags and Warning Signs for Investors
The pending complaint against McNicholas highlights several potential red flags that investors should be aware of when working with any financial advisor:
1. Failure to Properly Address Potential Misappropriation
One of the most concerning aspects of the allegations against McNicholas is the suggestion that he may have failed to fulfill his responsibility to notify an affected party (the daughter) about a potential misappropriation of funds that were intended for her benefit. Financial advisors have an obligation to operate with transparency and to act in the best interests of their clients and, in many cases, the designated beneficiaries of investment accounts.
2. Questions About Adherence to Legal Agreements
The complaint specifically references a marital separation agreement, suggesting that McNicholas may have been aware of terms that should have governed how certain assets were handled. Financial advisors who manage assets subject to legal agreements such as divorce settlements, trust documents, or other binding arrangements have a responsibility to ensure those agreements are honored.
3. Client Communication Concerns
Proper communication is at the heart of the financial advisor-client relationship. The allegations suggest potential deficiencies in how important financial matters were communicated to all relevant parties, particularly to those who had a direct interest in the assets in question.
4. Oversight of Account Activities
Financial advisors and their supervising firms have a duty to properly monitor account activities and to address any irregular or potentially inappropriate transactions. The allegations raise questions about whether adequate oversight was maintained in this case.
The Legal and Regulatory Framework
Financial advisors operate within a complex regulatory environment designed to protect investors and ensure fair and transparent markets. Several key rules and regulations are particularly relevant to the type of situation alleged in the McNicholas case:
FINRA Rule 2010: Standards of Commercial Honor and Principles of Trade
This fundamental rule requires brokers to observe high standards of commercial honor and just and equitable principles of trade. Failure to address known misappropriation of funds could potentially violate this basic standard of conduct.
FINRA Rule 2111: Suitability
While traditionally focused on investment recommendations, the suitability rule broadly requires brokers to act in their clients’ best interests. This includes proper handling of account distributions and ensuring that account activities align with legal obligations.
FINRA Rule 3240: Borrowing From or Lending to Customers
Though not directly applicable to misappropriation, this rule highlights the strict boundaries that must exist regarding the movement of funds between related parties, particularly when a broker becomes aware of potentially improper transfers.
SEC Fiduciary Duty Requirements
Investment advisers are subject to fiduciary duties that require them to act in their clients’ best interests, provide full and fair disclosure of all material facts, and eliminate or disclose all conflicts of interest.
State Securities Laws
In addition to federal regulations, state securities laws often impose additional requirements on financial advisors operating within their jurisdictions, particularly regarding disclosure obligations and fiduciary standards.
Implications for Investors Working with Michael McNicholas
Investors who are currently working with Michael McNicholas or who have worked with him in the past should consider several important factors:
- Review of Account Statements: Carefully examine all account statements and transaction records to identify any unusual or unexplained activity.
- Legal Agreements: If your investments are subject to any legal agreements (such as divorce settlements, trust arrangements, or estate plans), verify that those agreements have been properly implemented and respected.
- Beneficiary Designations: Confirm that all beneficiary designations are current and accurately reflect your intentions.
- Communication Practices: Assess whether you have received clear, consistent, and comprehensive communications about all aspects of your accounts.
- Disclosure Review: Request and review all disclosure documents related to your accounts, including investment advisory agreements, to understand the scope of your advisor’s responsibilities.
Guidance for Affected Investors
If you have concerns about how Michael McNicholas or any other financial advisor has handled your investments, several steps may help protect your interests:
1. Document Everything
Begin by gathering all relevant account statements, correspondence, marketing materials, and notes from conversations with your advisor. Establishing a clear timeline of events and communications will be crucial if you need to file a complaint or seek recovery of losses.
2. Request Account Information
You have the right to receive complete information about your investment accounts. Request copies of all account-opening documents, investment agreements, and transaction records if you don’t already have them.
3. Consult with a Securities Attorney
Before taking formal action, consult with an attorney who specializes in securities law and investor protection. An experienced securities attorney can help you understand your rights, evaluate potential claims, and determine the most appropriate course of action.
4. Understand the FINRA Arbitration Process
Most investment disputes are resolved through FINRA arbitration rather than in court. This process has specific rules and timelines that differ from traditional litigation. Key points to understand include:
- Eligibility: Generally, claims must be filed within six years of the event giving rise to the dispute.
- Procedure: The arbitration process typically involves filing a statement of claim, selection of arbitrators, discovery, and a hearing.
- Potential Outcomes: Arbitration can result in monetary damages, specific performance, or other remedies deemed appropriate by the arbitration panel.
5. Report to Regulators
Consider filing a complaint with relevant regulatory authorities, including:
- FINRA: Through the FINRA Investor Complaint Center
- SEC: Through the SEC’s online complaint form
- State Securities Regulators: Through your state’s securities division or department
How Our Investment Fraud Attorneys Can Help
Our firm specializes in representing investors who have suffered losses due to broker misconduct, unsuitable investment recommendations, or other violations of securities laws and regulations. Our approach includes:
Comprehensive Case Evaluation
We begin by conducting a thorough review of your investment history, account documentation, and communications with your advisor to identify potential violations and establish the strongest possible legal claims.
Forensic Account Analysis
Our team works with financial experts to analyze your account statements and transaction history, identifying patterns of activity that may indicate misconduct, unsuitable investments, or unauthorized transactions.
FINRA Arbitration Representation
We provide comprehensive representation throughout the FINRA arbitration process, from filing the initial statement of claim through the final hearing and implementation of any award.
Broker-Dealer Liability Assessment
In many cases, the broker-dealer firm may share liability for the actions of its registered representatives. We carefully evaluate potential claims against both individual advisors and their supervising firms.
Recovery Strategy Development
We develop tailored strategies to maximize your potential recovery, whether through negotiated settlements or formal arbitration proceedings.
The Importance of Acting Promptly
If you believe you may have been affected by the conduct described in this investigation or similar misconduct by Michael McNicholas or other financial advisors, it’s crucial to act promptly. Securities laws include strict statutes of limitations and eligibility requirements for filing claims:
- FINRA arbitration claims generally must be filed within six years of the event giving rise to the claim.
- State securities laws may impose additional time limitations.
- The passage of time can make it more difficult to gather evidence and establish the facts necessary to support your claim.
Don’t delay in protecting your financial future. If you have questions about your investments or concerns about how your accounts have been handled, reach out today. Call 800-950-6553 or complete our online form to schedule your no-obligation case evaluation with an experienced investment fraud attorney.
