Securities Lawyers Blog
The investment lawyers of Gana Weinstein LLP are investigating the regulatory action brought by the Financial Industry Regulatory Authority (FINRA) against Christopher Tolmacs (Tolmacs) working out of Portage, Michigan alleging that the broker borrowed client funds. The providing of loans or selling of promissory notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions – a practice known in the industry as “selling away”. According to the FINRA regulatory action (FINRA No. 20160489663-01) Tolmacs consented sanctions in the form of a permanent bar because he failed to provide documents and information requested by FINRA during the course their investigation into allegations that he borrowed funds from multiple customers.
At this time it unclear the nature and scope of Tolmacs’ outside business activities and private securities transactions. However, according to Tolmacs’ public records his outside business activities includes Harbinger Financial Group, Inc – listed as an insurance agency, and Harbinger Asset Management, Inc which is listed as a registered investment advisory firm. Often times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance agents to clients of those side practices.
In addition, Tolmacs has been subject to significant tax liens totaling over $225,000 in late 2015. Tax liens and judgements can provide an economic incentive to brokers to violate the securities laws to garner higher commissions and income.