Selling Away

Daniel Flores Discharged Over Selling Unapproved Financial Product

September 9, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Daniel Flores (Flores), formerly associated with Woodbury Financial Services, Inc. (Woodbury Financial) in Appleton, Wisconsin was terminated by his firm concerning allegations that Flores engaged in an unapproved financial transaction with a client. Thereafter in May 2018 a customer filed a complaint alleging that that Flores engaged in unauthorized and excessive trading. The claim is currently pending. In July 2018 FINRA sought documents and information from Flores which he refused to provide. Accordingly, Flores was barred from the industry for failing to respond to FINRA’s requests.

At this time, the claims against Flores are unclear as to the exact nature and extent of the activity. Flores has outside business disclosures including New Heights Insurance Services and Fox River Valley.

Advisor Stacy Cheney-Jamison Sanctioned Over Private Investment Sales

September 9, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Stacy Cheney-Jamison (Cheney-Jamison), a/k/a Stacy Cheney, Stacy Edwards, Stacy Kuczynski, and Stacy Sang was formerly associated with CUNA Brokerage Services, Inc. (CUNA) in Boca Rotan, Florida was barred by FINRA concerning allegations that Cheney-Jamison sold investments away from her firm.

In May 2018 FINRA found that Cheney-Jamison consented to the sanctions and to the entry of findings that she refused to provide information requested by FINRA in connection with its investigation into allegations regarding her involvement in private securities transactions and falsification of client account forms. In addition, in March 2018 a customer filed a complaint alleging multiple violations of the securities laws and claiming $350,000 in damages.

The allegations concerning private securities transactions are often accompanied by claims of engaging in outside business activities. Private securities transactions is a practice known in the industry as “selling away” – a serious violation of the securities laws.

At this time, the selling away claims against Cheney-Jamison are unclear as to the exact nature and extent of the activity. Cheney-Jamison does not have any outside business disclosures on her public record

Advisor Thomas Sova Terminated Over Unapproved Product Sales

September 7, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Thomas Sova (Sova), formerly associated with Hornor, Townsend & Kent, Inc. (Hornor Townsend) in Baton Rouge, Louisiana was terminated by his firm concerning allegations that Sova violated firm policies and procedures regarding disclosure of outside business activities relating to the outside sale of an unapproved and unregistered security. That termination came on the heels of an arbitration complaint filed a couple of months earlier in April 2018. The customer complaint alleged that Sova sold and unregistered security in May 2016 and seeks $100,000 in damages. The claim is currently pending.

At this time, the claims against Sova are unclear as to the exact nature and extent of the activity other than that it involves a mortgage investment fraud or real estate security. Sova has outside business disclosures including Sova Financial Group – his investment d/b/a. Sova also discloses that he is the owner of rental property.

FINRA Bars Bradley Tennison for Alleged Selling Away Practices

August 3, 2018 | by Staff Attorney

The investment attorneys at Gana Weinstein LLP are currently investigating previously registered broker Bradley Tennison (Tennison). According to BrokerCheck Records, the Financial Industry Regulative Authority (FINRA) barred Tennison indefinitely from the financial industry for failing to appear to an on the record testimony regarding an investigation of Tennison’s outside business activities at Geneos Wealth Management, Inc. (Geneos Wealth Management). In addition, Tennison has been subject to three customer disputes, one of which is still pending. The majority of these disputes involve unsuitable limited partnerships and selling away. Tennison has also been subject to termination from two firms of employment.

In April 2018, a customer alleged that in 2016, Tennison recommended a former client to invest $300,000 in “The Joseph Project”, which he represented to be a 12 month investment with 5 % returns. The customer never received any statements or returns on her principal payment. The customer has requested $300,000 in damages. This dispute is currently still pending.

Subsequently, in April 2018, Tennison was terminated from Geneos Wealth Management for failing to be in compliance with the firm’s policies and regulations regarding outside business activities and selling away.

John James Barred by FINRA Over Allegations of Outside Business Activity

July 13, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating previously registered broker John James (James). According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA), in March 2016, James was discharged by his firm, Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) based on allegations that James was engaging in outside business activities, private investments, and borrowing money from clients without disclosing the activities to the firm. Subsequently, in September 2016, James was also discharged from Stifel Nicolaus for providing inaccurate information on his employment application (U5) regarding the status of an internal inquiry at his prior firm, Merrill Lynch.

In December 2017, FINRA barred James from the industry after James failed to provide FINRA with requested documents and information regarding these allegations and activities. FINRA sought documents concerning the circumstances surrounding Jones’s termination from his member firm and of certain outside business activities that James was involved in while registered with the firm. After James refused to show up to an on-the-record testimony regarding these allegations, he was barred from the industry for being in violation of F1NRA Rule 8210, James violates FINRA Rules 8210 and 2010.

In addition, James has been subject to one customer complaint. In May 2009, a customer alleged that James recommended unsuitable investments. The case was settled at $160,000 in damages.

Mark Solomon Accused of Selling $1.4 Million In Private Placements Without Notifying His Firm

July 6, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Mark Solomon (Solomon), formerly associated with M Holdings Securities, Inc. (M Holdings) in Wynnewood, Pennsylvania was suspended by FINRA concerning allegations that he engaged private securities transactions in a real estate private placement. M Holdings terminated Solomon in January 2016 during an ongoing internal review that centered around potential violations of investment related statues and the firm’s policies and procedures.

Thereafter in January 2018 FINRA found that Solomon solicited seven investors to purchase a total of $1,400,000 in interests in a private placement without providing his firm written notice of that activity or obtaining the firm’s written approval prior to doing so. FINRA found that Solomon first provided written notice of his sales activity to his firm after responding to inquiries made by FINRA during an examination of the firm. FINRA suspended Solomon for 12 months and imposed a fine.

At this time it is unclear the extent of Solomon’s outside business activities or private securities transactions. Solomon disclosed a number of outside business activities including that he is the control person limited partnerships, is involved with Devon Park Partnership, Horsham Business Center, and 1000 Howard Blvd Partners LP.

Wells Fargo Terminates Robert Meyers for Recommending Private Investments

July 6, 2018 | by Staff Attorney

The investment fraud attorneys at Gana Weinstein LLP have been investigating previously registered broker Robert Meyers (Meyers).

According to the Financial Industry Regulation Authority (FINRA) BrokerCheck records, in October 2017, Meyers was terminated from Wells Fargo Clearing Services LLC (Wells Fargo) for recommending investments to customers that he did not notify the firm about.

In addition, Meyers has been subject to eight customer disputes. In August 2005, a customer alleged that Meyers failed to follow the customer’s instructions regarding the investment. The customer requested $1,000,000 in damages.

James and Lorraine Conaway Accused of Selling Unapproved Tycon Properties to Investors

July 4, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor James and Lorraine Conaway (Conaway), formerly associated with USA Financial Securities Corporation (USA Financial) in Tustin, California was terminated by his firm concerning allegations of failure to comply with firm advertising and outside business activity (OBA) procedures, participating in financial transactions with securities clients, and failure to fully cooperate with a firm investigation.

In May 2018 FINRA sanctioned the Conaways and provided more details in their private securities transactions. FINRA alleged that Conaway failed to timely and completely disclose the scope of his real estate related outside business activities in referring clients to Tycon Properties among other business relationships. FINRA found that the Conaways established Tycon Properties to refer clients to investments in rental real estate properties. FINRA found that Conaway began a business relationship with a vendor of distressed rental properties in St. Louis, Missouri which was controlled by an individual who had pleaded guilty to unrelated federal charges for submitting false loan applications to banks and sentenced to 15 months imprisonment. FINRA determined that Conaway’s company received over $450,000 in referral fees from the individual’s vendor company and referred more than 35 investors who contracted to purchase one or more rental properties.

At this time it is unclear the extent of Conaways outside business activities or private securities transactions. However, Conaway disclosed a number of outside business activities including that he operates his securities business through a d/b/a C&C Wealth Advisory Group. Other OBAs include Lorcon Inc., Brancor Properties, LLC, and American Family Life Assurance Company of Columbus.

Advisor Oscar Francis Terminated By MML Investor Services After Private Securities Transactions Discovered

June 12, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Oscar Francis (Francis), formerly associated with MML Investor Services, LLC (MML) in Ft. Lauderdale, Florida, was terminated for cause by MML concerning allegations that he engaged in private securities transactions. MML stated that Francis’ was “terminated in connection with an investigation into an undisclosed outside business activity, potential selling away and an unauthorized non-securities life insurance transaction.” In addition, Francis has been subject to three customer complaints concerning unapproved investments. Further, in April 2017, the Department of Justice opened an investigation into Francis’ investment activities.

At this time it is unclear the extent and nature of the outside business activities or private securities transactions that occurred. The allegations concerning private securities transactions is a practice known in the industry as “selling away” – a serious violation of the securities laws.

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.

Advisor Brian Travers Barred By Regulator For Failing to Disclose Securities Transactions

June 11, 2018 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Brian Travers (Travers), operating under the d/b/a Travers and Associates, Inc., in December 2017, was barred from the financial industry by FINRA concerning allegations that he engaged in private securities transactions. According to FINRA Travers consented to the sanction and bar due to the fact that he refused to appear and provide FINRA with testimony in connection with their investigation into potential undisclosed outside business activities and private securities transactions. At this time it is unclear the extent and nature of the outside business activities or private securities transactions that occurred.

Travers employer, MML Investors Services, LLC (MML) discharged Travers in March 2017 alleging that Travers engaged in undisclosed outside business activities. The only activity listed on Travers’ public records is his insurance business. FINRA’s allegations concern private securities transactions– a practice known in the industry as “selling away” – is a serious violation of the securities laws.

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.