Securities Lawyers Blog
The Financial Industry Regulatory Authority (FINRA) recently barred broker Derek Weaver (Weaver) alleging that Weaver failed to provide documents and information to FINRA in response to demands made to investigate the broker’s activities. On December 1, 2014, FINRA sent Weaver a request for documents concerning allegations that he participated in a Ponzi scheme. The details concerning the exact nature of the alleged Ponzi scheme and Weaver’s role are not yet fully known.
The allegations against Weaver are consistent with a potential “selling away” securities violation. 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. Under the FINRA rules, a brokerage firm owes a duty to properly monitor and supervise its employees in order to detect and prevent brokers from offering such products. In order to properly supervise their brokers each firm is required to establish and maintain written supervisory procedures and implement such policies in order to monitor the activities of each registered representative. Selling away often occurs in environments where the brokerage firms either fails to put in place a reasonable supervisory system or fails to actually implement that system and meet supervisory requirements.
In selling away cases, investors are unaware that the advisor’s investments are either not registered or not real. Typically investors will not learn that the broker’s activities were wrongful until after the investment scheme is publicized or the broker simply shuts down shop and stops returning client calls.
According to Weaver’s BrokerCheck records, the advisor was registered with MetLife Securities, Inc. from May 2008, until January 2012. Thereafter, Weaver was associated with Pruco Securities, LLC from February 2012, until April 2013. In addition, Weaver stated that he is the co-owner of Rammer Jammer Beer Co.
Investors who have suffered losses through Weaver’s investment recommendations may be able recover their losses through arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away, Ponzi schemes, and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.