WILLIAM HERBERT MURPHY is currently employed as a Broker and/or Investment Adviser at WM. H. MURPHY & CO., INC. located at 770 SOUTH POST OAK LANE, SUITE 690, HOUSTON, TX, 77056.
WILLIAM HERBERT MURPHY has worked at WM. H. MURPHY & CO., INC. since September 27, 1990
Disclosure History
WILLIAM HERBERT MURPHY has 2 Disclosure Event(s).
Date: May 02, 2018 Category: Customer Dispute Allegations: Misrepresentation, Breach of Contract, Breach of Warranty, Unjust Enrichment, Violation of CA Business & Professional Codes & Civil Conspiracy. Damage Amount Requested: $650,000.00 Broker Comment: Wide Merchant Investments, Inc. and Wide Merchant Risk, LLC (collectively "Wide Merchant") alleged intentional misrepresentation, negligent misrepresentation, breach of contract, breach of warranty, unjust enrichment, breach of fiduciary duty, violation of California Business and Professional Code 17200 and civil conspiracy against Murphy Ventures, VI, Murphy & Co., Inc., William H. Murphy and six other parties (collectively the "Parties") regarding a non-securities financial transaction. Wide Merchant knowingly entered into the transaction and executed a certification of resolution of the borrower, authorizing resolution, risk control instrument confirmation, loan an and security agreement, commercial loan note and security pledge agreement acknowledging the terms and conditions of the non-securities transaction. Based on the written and verbal representations made by Wide Merchant with respect to the transaction, the Parties deny the claims.
Date: November 07, 2014 Category: Regulatory Initiated By: FINRA Allegations: MURPHY WAS NAMED A RESPONDENT IN A FINRA COMPLAINT ALLEGING THAT HIS MEMBER FIRM, THROUGH HIM, ITS PRESIDENT AND CCO, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH SECTION 5 OF THE SECURITIES ACT. THE COMPLAINT ALLEGES THAT THE FIRM, THROUGH MURPHY, DID NOT HAVE ADEQUATE PROCEDURES TO PREVENT THE SALE OF UNREGISTERED AND NON-EXEMPT SECURITIES. AS THE FIRM'S PRESIDENT AND CCO, MURPHY HAD SOLE RESPONSIBILITY FOR THE ADEQUACY OF THE FIRM'S SUPERVISORY PROCEDURES, AS WELL AS THE CONTENT OF ITS WRITTEN SUPERVISORY PROCEDURES. THE FIRM PARTICIPATED IN THE SALE OF THREE PRIVATE PLACEMENTS THAT WERE NOT REGISTERED PURSUANT TO THE EXEMPTION PROVIDED BY SEC RULE 506 OF REGULATION D. Resolution: Decision Regulator Statement: Extended Hearing Panel decision rendered June 3, 2016 wherein Murphy was fined $50,000, suspended from association with any FINRA member in any capacity for six months, and required to re-qualify by examination before he re-enters the securities industry in any capacity. Murphy was ordered to pay, jointly and severally, costs in the amount of $15,888.48. The sanctions were based on findings that Murphy's member firm engaged in unregistered sales of more than $1 million of securities to customers, in violation of Section 5 of the Securities Act of 1933. The findings stated that the firm failed to prove that an exception to the registration requirement existed. The unregistered securities were sold through general solicitation and as such the exemptions that the firm claimed were not valid. The findings also stated that the firm and Murphy failed to establish and maintain a supervisory system, including WSPs, reasonably designed to ensure compliance with Section 5 of the Securities Act of 1933 and prevent the sale of unregistered, non-exempt securities. Murphy was responsible for maintaining current WSPs that accurately stated the procedures being followed by the firm. The firm, through Murphy, failed to establish and maintain adequate procedures tailored to its new line of business as the broker-dealer responsible for marketing and selling private placements issued by affiliates of an entity. The firm failed to have any WSPs setting out mechanisms for compliance with Section 5 of the Securities Act of 1933 when marketing and selling private placements issued by the entity's affiliated companies to investors who were introduced to the investments via radio shows and workshops hosted by the firm's registered persons. Murphy was also responsible for supervising the entity's OSJ. Murphy was aware of the general solicitations because he monitored the radio shows and pre-approved the scripts. In addition, Murphy was the individual responsible for accepting customer accounts, and supervising all associated persons, advertising, and private placement activities. Despite Murphy's duties, Murphy failed to supervise the entity's OSJ, its registered persons, and its activities. Murphy's supervisory lapses allowed registered representatives of the firm who worked in the entity's OSJ office to obtain new customers through general solicitation (radio shows and workshops) and sell those customers unregistered securities in offerings that had commenced before establishing a substantive relationship with them, in contravention of Section 5 of the Securities Act of 1933. Murphy failed to recognize that reading the offering materials would be important when qualifying prospective customers to invest in the offerings. In addition, as a result of the firm's lack of supervisory procedures, a representative of the firm, who was a supervisor, made no effort to ensure customers were not placed into offerings open prior to the existence of a substantive relationship with the firm. The findings also included that the firm, through Murphy, used a cooling-off period when participating in the sales of the unregistered securities. However, the firm failed to establish and maintain procedures defining an appropriate cooling-off period for private placements, requiring customers to wait an appropriate cooling-off period before offering unregistered securities to them, and describing a review process wherein supervisors would verify that customers waited the appropriate cooling-off period.On June 28, 2016 this decision was appealed to the NAC and the sanctions are not in effect pending the appeal. Broker Comment: The FINRA Hearing Panel ("Panel") found that William H. Murphy and W.H. Murphy & Co. Inc. (collectively "Murphy") violated Section 5 of the Securities Act and that Murphy failed to maintain a supervisory system reasonably designed to ensure compliance with Section 5 of the Securities Act (the "Decision"). Murphy is appealing this Decision to NAC. Murphy contends that in order to justify this conclusion, the Panel reached a Decision that is completely arbitrary, capricious, an abuse of discretion, contrary to law and securities industry standards and/or it was not supported by substantial evidence in the record. Murphy is confident that the NAC appeal will prevail after the evidence is reviewed.
More Information
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