Finra Expels Firm Over Excessive Trading–Including Gold Star Family Accounts

“Monmouth abdicated its responsibility to reasonably supervise its representatives’ trading, resulting in substantial harm to customers, including Gold Star families,” says Christopher Kelly, acting head of Finra’s Department of Enforcement. “The egregiousness of the firm’s sales practice and supervisory violations necessitated expulsion of the firm from Finra membership.”

Monmouth accepted the expulsion with Finra June 13 without admitting or denying the charges. Finra announced the settlement Friday. Bryan Ward, the attorney who represented Monmouth in the Finra proceeding, did not immediately respond to a request for comment.

Representatives of Monmouth could not immediately be reached for comment. The firm’s website is inactive. A call to a phone number listed for Monmouth was answered by a recording saying that the voice mail is full.

Robert Meyer, who was Monmouth’s CEO, is no longer registered as a broker, but is registered with a registered investment advisor called Monmouth Advisory Services. Meyer did not respond to a phone message left with that firm.

Raymond Clark, who was Monmouth’s chief compliance officer, is now registered with Alexander Capital. A phone message left with that firm was not immediately returned.

The third individual identified as an owner or executive officer with Monmouth in BrokerCheck, Finra’s online database, is Hasnain Naveed, who is currently registered with a firm called Neon Money. A woman who answered the phone at Neon Money said Naveed is an outsourced consultant there, and provided a phone number to reach him at ACI—Accounting and Compliance International. Naveed did not immediately respond to a voice mail left there.

Army connection. Also on Friday, the Securities and Exchange Commission and the Department of Justice filed civil and criminal charges against a former representative of Monmouth, Caz Craffy. Craffy, who has already been barred from the industry by Finra, had been a financial counselor for the U.S. Army and a major in the Army Reserve.

In his role as a financial counselor from May 2018 through November 2022, “Craffy used his position and access to manipulate grieving family members by directing them to transfer their benefits into brokerage accounts he managed outside of his official duties with the U.S. Army,” according to the SEC. Over 54 months with Monmouth and another firm, Craffy’s clients paid more than $1.64 million in commissions and fees, while realizing $1.79 million in losses.

The Justice Department says Craffy defrauded two dozen Gold Star families, and is charging him with six counts of wire fraud and a single count of securities fraud, making false statements in a loan application, committing acts furthering a personal financial interest, and making false statements to a federal agency.

“Stealing from Gold Star families whose loved ones made the ultimate sacrifice in service to our nation is a shameful crime,” says Attorney General Merrick Garland. “As alleged in the indictment, the defendant in this case used his position as an Army financial counselor to defraud Gold Star families, steal their money, and enrich himself. Predatory conduct that targets the families of fallen American service members will be met with the full force of the Justice Department.”

Craffy did not immediately respond to a message seeking comment via LinkedIn. Court records do not indicate that he has formally retained a lawyer.

Finra’s take. Finra said that Monmouth’s conduct amounted to a violation of Regulation Best Interest, the SEC’s rule governing broker conduct. The excessive trading in 110 customer accounts, each of which experienced substantial losses, amounted to a violation of Reg BI’s care obligation.

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