Michael Magruder Barred For Failing To Comply With Arbitration Agreement

Michael Edwin Magruder (CRD# 4579211) is a previously registered broker and investment advisor. His last employer was Raymond James & Associates, Inc. (CRD# 705) of Orlando, FL. His previous employers include Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD# 7691) of Destin, FL, Wells Fargo Advisors, LLC (CRD# 19616) of Southlake, TX, and Raymond James & Associates, Inc. (CRD# 705) of Dallas, TX. He has been in the industry since 2003.

Following two regulatory actions, Magruder is now barred by FINRA. Following the Form U5 amendment filed by Merrill Lynch after his termination, FINRA initiated an investigation. FINRA also sent Magruder a notice on February 28, 2025, requesting related documents and information on whether he borrowed money from clients. On May 13, 2025, Magruder submitted an incomplete response that did not fully comply with FINRA’s request.

FINRA issued an Acceptance, Waiver & Consent (AWC) letter to Magruder, who signed it on June 6, 2025. He acknowledged FINRA’s request and indicated that he would not provide additional information under FINRA’s Rule 8210. By signing the AWC, Magruder accepted the sanction of being permanently barred from association with any FINRA member. The bar became permanent on June 27, 2025.

Previous FINRA Suspension

Previously, FINRA suspended Magruder for failing to comply with an arbitration award on 10/24/2024. Merrill Lynch Pierce Fenner & Smith Inc. filed a FINRA arbitration order against Magruder for $200,000 in promissory notes, signed on August 21, 2015, and April 21, 2016. The firm signed the Submission Agreement on May 14, 2024. The firm brought FINRA arbitration for a “settlement payment missed by Respondent,” including attorneys’ fees and other costs, totaling $201,300. Magruder did not appear for the arbitration meeting. FINRA signed the order on August 28, 2024.

On 9/22/2025, a subsequent FINRA arbitration awarded Merrill Lynch Pierce Fenner & Smith Inc. $200,000 for the missed award payment plus other incidental fees associated with arbitration after Magruder failed to comply with the previous award. This ruling issued a suspension for Magruder.

Raymond James terminated Magruder’s employment on 7/3/2024 following the first dispute, giving the reason as, “Individual alleged to have failed to follow firm procedures with respect to receipt of loans from customers and failed to comply with firm policies requiring updates to registration Form U4.”

Customer-Filed Disputes

Additionally, Magruder is the subject of several customer dispute disclosures. The most recent dispute was filed on 3/6/2026, alleging that Magruder borrowed money and failed to repay. The client requests $600,000 in damages, and the claim is currently pending.

Before this disclosure, another customer dispute filed on 8/26/2025 contains similar allegations of borrowing money and “absconding” with the funds. The client requested $250,000 in damages, and the claim was settled for $290,725.00.

In another dispute, dated 7/3/2024, the client alleged that Magruder requested a loan, which they agreed to and made. The client requested $175,000 in damages, and the claim was settled for $189,259.57.

In the previous dispute dated 7/6/2024, there was a loan from the client to Magruder and a failure to follow the client’s request to sell a specific stock in their account. The firm settled this claim for $300,000. No other details are available.

Another customer dispute dated 5/29/2025 included similar allegations, in which the customer loaned money to Magruder, who failed to repay the balance. The client requested damages of $!50,000, and the dispute was settled for $170,000.

The next subsequent dispute is dated 6/12/2025. It states that not only did Magruder convince the client to loan him money, he also “exercised discretion in the former client’s account to sell securities to fund the loan.” The client requested $686,552.00 in damages, and the claim was settled for $720,000.

Did You Invest With Michael Edwin Magruder?

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