John Morabito and Raymond James: Key Facts About the Multi-Million Dollar Dispute

Raymond James & Associates, Inc. and financial advisor John Angelo Morabito (CRD #4651112) are no strangers to headlines within the financial services industry. Currently registered with Raymond James & Associates, Inc., John Morabito’s career spans noteworthy firms such as RBC Capital Markets, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Morgan Stanley. For investors considering entrusting their assets to an advisor, understanding the facts of a professional’s background—including disputes and terminations—is critical for making informed decisions. Let’s examine recent events and disclosures related to John Angelo Morabito, and what every investor needs to know about the risks posed by unsuitable investment advice and compliance issues in the financial industry.

Summary Table: John Angelo Morabito’s Regulatory Background

The $3 Million Customer Dispute: Details & Suitability Concerns

In the financial advisory world, client disputes and settlements are rare, but when they occur, they deserve close attention. On November 27, 2018, a client filed a complaint against John Angelo Morabito alleging that he made unsuitable recommendations involving over-the-counter equity securities (“Equity-OTC”) over a period running from 2012 through December 2017. This customer sought an extraordinary $3,000,000 in damages—a sum representing life-changing consequences for most investors.

Here are the specifics of the claim:

• Date of dispute: November 27, 2018
• Alleged activity period: 2012 – December 2017
• Product: Equity-OTC (over-the-counter equities)
• Damages sought: $3,000,000
• Settlement amount: $350,000
• Settlement date: May 29, 2019
• Morabito’s financial contribution: None; Merrill Lynch paid over his objection

According to regulatory disclosures, John Morabito denied any wrongdoing and asserted that the account in question was non-discretionary—that is, all transactions required explicit client approval. Nonetheless, the claim was settled by Merrill Lynch, Pierce, Fenner & Smith Incorporated for $350,000. The firm’s willingness to settle, even over the advisor’s objections, can indicate that it saw a material risk or at minimum a desire to resolve the issue for reputational and client service reasons.

Unsuitable Investments: Why It Matters for Investors

Suitability is at the heart of broker-client relationships. Regulatory rule FINRA Rule 2111 requires that a broker must have a reasonable basis to believe every recommendation is appropriate for a particular customer based on their personal profile, risk tolerance, investment objectives, and financial circumstances. The suggestion of Equity-OTC securities—risky, less liquid investments traded outside major exchanges—may be unsuitable for many investors, especially those with lower risk tolerance or less investing experience. This is a vital distinction for investors to grasp, as unsound advice has far-reaching effects.

In fact, research consistently shows that bad financial advice—including fraud, conflicts of interest, and unsuitable product recommendations—costs American investors billions every year. A recent report from Investopedia explains that investment advisor fraud and misconduct can ultimately drain retirement savings and jeopardize financial security. According to a financial advisor complaints resource, investor losses from advisor misconduct are estimated to top $17 billion annually.

Employment Separation: Compliance Violations and Policy Breaches

Another event in John Angelo Morabito’s professional file involves his discharge from RBC Capital Markets, LLC on April 8, 2026. According to broker records, the termination cited violations of several firm policies:

• Code of Conduct
• Social Media for Business Policy
• Communications Policy

A broker-reported disclosure also references a similar termination from Raymond James & Associates, Inc. as of April 28, 2026, citing the same compliance reasons. In the regulated world of financial advice, breaches of communications or social media policies are not minor infractions. Safeguards exist so that firms and regulators can oversee all communications, preventing off-the-books recommendations and potential conflicts of interest from being hidden from compliance review.

Understanding FINRA and SEC Rules that Protect Investors

There are several rules designed to protect investors from the exact types of risks described above:

• FINRA Rule 2111 — Suitability: Every recommendation must fit the client’s profile. It’s not simply about client agreement—advisors must exercise meaningful judgement in evaluating what is appropriate.
• FINRA Rule 2210 — Communications with the Public: This rule establishes requirements for how brokers interact with clients and the public, including accuracy, approval process, and recordkeeping. Violations pose direct regulatory risks.
• Regulation Best Interest (Reg BI): Effective June 30, 2020, this SEC rule sets a new standard for broker-dealers, demanding that they put client interests first when making any recommendations. Advisors must fully disclose conflicts, assess alternatives, and meet enhanced care standards.

Background and Exam History: John Angelo Morabito

John Morabito’s background includes registration with several highly regarded financial firms:

• Raymond James & Associates, Inc. (since 2026)
• RBC Capital Markets, LLC
• Merrill Lynch, Pierce, Fenner & Smith Incorporated
• Morgan Stanley

He has passed multiple industry exams, including:

• Securities Industry Essentials (SIE)
• Series 7 – General Securities Representative
• Series 31 – Futures Managed Funds
• Series 66 – Uniform Combined State Law Exam

His FINRA BrokerCheck record shows just one customer dispute, one separation disclosure, and no reported disciplinary actions by the Securities and Exchange Commission (SEC), state regulators