As a financial analyst and legal expert with over a decade of experience, I’ve seen my fair share of cases involving risky investments and broker misconduct. The recent allegations against Matthew Childs, a San Francisco-based broker registered with Portsmouth Financial Services, are serious and warrant close examination for any investor who may have been affected.
According to a recent disciplinary action by the Financial Industry Regulatory Authority (FINRA), Mr. Childs allegedly recommended non-traditional exchange-traded products (NT-ETPs) to retail customers without having a sufficient understanding of the risks and features associated with these complex financial instruments. As a result, FINRA suspended Mr. Childs from registering in all capacities for two months. The customers involved incurred over $31,600 in total net realized losses on these unsuitable investments.
NT-ETPs are complex products that generally rebalance their portfolios daily, making them typically unsuitable for retail investors planning to hold them for more than one trading session. FINRA requires broker-dealers to establish heightened supervisory obligations and adequately train representatives before allowing them to recommend such products. Firms that fail to do so may violate FINRA Rules 3110 and 2010.
Matthew Childs’ background and past disputes
Matthew Childs has been a registered broker since 1999, working at various firms including Morgan Stanley and Oppenheimer & Company before joining Portsmouth Financial Services in 2016. With 24 years of industry experience, he has completed several key exams like the Series 66 and Series 7.
However, this is not the first time Mr. Childs has faced investor disputes. Between 2012 and 2023, three parties lodged complaints alleging misrepresentation, unsuitable recommendations, and failure to conduct reasonable due diligence. One of these disputes, filed in 2023, involved losses in GWG L Bonds. In total, his member firms settled these claims for over $300,000.
As American financier Bernard Baruch once cautioned, “Something that everyone knows isn’t worth knowing.” When it comes to complex investment products, investors must be able to rely on their financial advisors to thoroughly understand and clearly communicate the risks involved. Failure to do so can lead to devastating losses.
In fact, a 2021 study by the North American Securities Administrators Association found that over 50% of investment fraud victims were influenced by their advisor’s recommendation to invest. This underscores the immense trust placed in financial professionals and the severe consequences when that trust is misplaced. Investopedia also highlights the importance of identifying red flags and thoroughly researching advisors to avoid falling victim to investment fraud or bad advice.
Recourse for investors
If you’ve suffered losses due to exchange-traded products or other unsuitable investments recommended by Matthew Childs, you may be able to recover damages by filing an arbitration claim. Investors should never be left in the dark about the risks associated with the products in their portfolios.
At MDF Law, our experienced attorneys have a strong track record of securing millions in recoveries for our clients nationwide. We work on contingency and offer free consultations to help investors understand their legal options. If you have concerns about your accounts with Mr. Childs or Portsmouth Financial Services, don’t hesitate to call us at 800-767-8040 for a no-obligation case assessment.
Remember, submitting this form does not create an attorney-client relationship. Please do not include any confidential or sensitive information. However, taking action is the first step towards protecting your financial well-being and holding bad actors accountable. Together, we can work to build a more transparent and trustworthy financial system for all.
