Securities Lawyers Blog
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.