FINRA Suspends Broker for Outside Business Activities

FINRA suspended a firm’s former broker for engaging in undisclosed outside business activities.

According to the AWC, the broker had actively managed real estate investment entities for nearly a decade without providing written notice to the firm. FINRA also found that the broker failed to disclose that “one of his [] customers had been an investor” in the broker's real estate entities.  FINRA said the broker “inaccurately affirmed on multiple annual compliance questionnaires” that he was in full compliance with firm policies which "required registered representatives to provide written notice ... and receive approval from the firm, before engaging in outside business activity."

FINRA also clarified that although the broker is “not currently registered with a member firm,” he remained under FINRA’s jurisdiction.

FINRA determined that the broker violated FINRA Rule 3270 (“Outside Business Activities of Registered Persons”) and Rule 2010 (“Standards of Commercial Honor and Principles of Trade”).

To resolve the matter, the broker consented to a two-month suspension from associating with any FINRA member in any capacity and a $5,000 fine.