Malcolm Reader Allegedly Misrepresents Puerto Rico and Virgin Island Bonds

The law firm of Oakes & Fosher is presently investigating the alleged misconduct of securities broker Malcolm Reader. According to his publicly available FINRA BrokerCheck report, Malcolm Reader has been the subject of multiple customer complaints over the course of his career.

Malcolm Reader is a Florida based securities broker. He has worked in the securities industry for thirty-seven years. During his career, he has been registered with six different securities firms.

His Registrations

• J.B. Hannauer & Co. (1982)


• Hanauer, Stern & Company Incorporated (1982-1983)


• Bevill, Bresler & Schulman Incorporated (1983-1985)


• E.F. Hutton & Company (1985)


• Moore & Schley, Cameron & Co. (1985-1988)


• GMS Group (1988-Present)

The Allegations

• In June 1988, a customer alleged that Malcolm Reader made material misrepresentations, breached his fiduciary duty, and handled his account negligently in connection with certain municipal bond transactions executed for his account. This case was settled for $12,500 in damages.


• In March 2004, a customer alleged that Malcolm Reader failed to disclose the risks associated with certain fixed income investments. This case was settled for $25,000 in damages.


• In December 2015, a customer alleged that Malcolm Reader violated MSRB Rule G-17 and FINRA Rules 2111, 2010, and 2020. This case went to arbitration where the customer was awarded $44,325 in damages.


• In November 2017, a customer alleged that Malcolm Reader made material misrepresentations and recommended highly unsuitable Puerto Rico and Virgin Island Bonds for the period of 2012 and 2013. This case was settled for $70,000 in damages.

What Does This Mean?

Puerto Rico municipal bonds were quite popular for a period of time. This is because they were triple tax exempt. Since Puerto Rico is not technically a state, municipal bonds are exempt from federal, state, and local taxes. Normally, an individual needs to reside where the bond is located to receive its tax exemption benefits; however, this was not the case with these Puerto Rico municipal bonds and closed-end bond funds. Investors all over the nation could purchase these bonds while receiving the tax benefits. However, Puerto Rico eventually filed for bankruptcy and defaulted on these bonds.

Oakes & Fosher Can Help

Many investors are unaware of the legal recourse available to them after losing money due to securities broker fraud and/or negligence. The truth is that investors who have lost money in this fashion may actually be entitled to damages.

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with Malcolm Reader, please contact Oakes & Fosher for a free and private consultation.