FINRA Fines General Securities Representatives for Failing to Disclose Outside Business Activities

In a FINRA disciplinary proceeding, the Department of Enforcement fined three general securities representatives for failing to disclose outside business activities.

According to FINRA, the representatives received payments for referring customers to a metals trading firm group without providing written advanced notice to their member firm, Royal Alliance Associates, in violation of FINRA Rule 3270 (Outside Business Activities of Registered Persons) as well as their firm's prohibition on such activity. Additionally, one of the representatives and supervisor, Charles Taylor, allegedly failed to reasonably supervise the representatives, and failed to enforce the firm's policies and procedures in violation of NASD and FINRA Rules (see attached).

To settle the charges, Mr. Taylor agreed to (i) a suspension of six months in all capacities, (ii) a suspension of six months in a principal capacity, and (iii) a fine of $25,000. Another representative, Jodi Padgett, agreed to (i) requalify as a principal securities representative and (ii) pay a fine of $15,000. The last representative involved, John Farmer, agreed to pay a fine of $6,000.