Broker Michael Magruder Suspended After Failing To Comply With FINRA Arbitration Agreement

Michael Edwin Magruder (CRD# 4579211) is a previously registered broker and investment advisor, last employed with 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.

Magruder is the subject of ten disclosures, five of which are customer disputes. In the first dispute, dated 7/3/2024, the client alleged that Magruder requested a loan, which they agreed to and made. The client requested damages of $175,000, and the claim was settled for $$189,259.57.

The second dispute, dated 7/6/2024, contained both 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 claim’s settlement was 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 damages of $686,552.00, and the claim was settled for $720,000.

The most recent dispute was filed on 8/26/2025 and includes similar allegations of borrowing money and failing to repay. The client requested damages of $250,000, and the claim was settled for $290,725.00.

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.”

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. FIRNA signed the order on August 28, 2024.

On 10/24/2024, FINRA suspended Magruder for failing to comply with the arbitration award. The suspension is indefinite until Magruder pays the settlement amount in conjunction with the arbitration.

FINRA sent Magruder a letter on February 28, 2025, requesting documents and information related to his termination from Raymond James. Although Magruder initially offered some info on May 13, 2025, it was incomplete and considered a refusal to comply with FINRA’s request. On 6/27/2025, Magruder signed a Letter of Acceptance, Waiver & Consent (AWC) agreeing to the sanction of being permanently barred from any association with any FINRA member.

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 also issued a suspension for Magruder.

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