Securities Lawyers Blog
Michael J. Kmetz (Kmetz) was barred by the Financial Industry Regulatory Authority (FINRA) over allegations concerning the sale of securities away from his member firm involving an elderly customer by accepting a bar from the securities industry.
On February 15, 2013, FINRA sent a letter to Kmetz requesting that he appear for testimony in connection with a complaint from an elderly investor who alleged that Kemtz had engaged in a variety of business activities and transactions. The customer’s complaint alleges that Kemtz sold securities away from Park Avenue. On March 12, 2013, Kemtz advised FINRA that he would not cooperate with the regulator’s requests for documents or testimony. Consequently, Kemtz was barred from the securities industry.
The accusations made against Kemtz are consistent with a “selling away” violation. Selling away occurs when a securities broker solicits securities that are not approved by the broker’s affiliated firm. Selling away is prohibited under FINRA Rule 3040, as well as other securities laws. The most common securities products solicited in selling away schemes are private placements and promissory notes.