Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Nicholas Radke (Radke), formerly associated with MML Investors Services, LLC (MML Investors) in December 2018, was sanctioned and barred from the securities industry by FINRA over accusations of potentially selling unapproved products.
In December 2018 FINRA alleged that Radke consented to the sanction and a bar from the industry because he failed to provide FINRA with requested documents and information in connection with allegations that Radke participated in a private securities transaction without prior approval from his member firm.
The providing of loans or selling of notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”.
At this time it is unclear the nature and scope of Radke’s activities. Radke’s disclosures include outside business activities (OBAs). At this time it is unclear whether the unapproved products involve any of these entities.
In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. However, even though when these incidents occur the brokerage firm claims ignorance of their advisor’s activities the firm is obligated under the FINRA rules to properly monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Radke entered the securities industry in 1995. From July 2008 through June 2011 Radke was associated with LPL Financial LLC. From May 2011 until May 2018 Radke was associated with American Independent Securities Group, LLC. Finally, from June 2018 through October 2018 Radke was registered with MML Investors out of the firm’s Irvine, California office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Investors may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.