Jody Ethan Thompson of New York New York a stockbroker formerly registered with Alexander Capital L.P. has been suspended for five months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by findings that (1) Thompson provided unsuitable investment recommendations to customers concerning promissory notes and Regulation D offerings and (2) Thompson effected trades in a customer’s account on a discretionary basis without written authorization from the customer. Letter of Acceptance Waiver and Consent No. 2017055815301 (Feb. 28, 2020).
According to the AWC, from August of 2015 to April of 2017, Thompson advised one or more customers to purchase investments in a fund established to pool money so that the fund could buy investments through special purpose vehicles. The AWC stated that customers were solicited for the purchase of two fund series that involved private technology companies’ issuance of convertible notes. Thompson neglected to perform due diligence which prevented him from comprehending the risks of those investments and how interest was paid on those products. FINRA stated that Thompson also failed to comprehend the fees charged to customers for investing. The AWC indicated that the stockbroker persuaded a customer to invest $1,000,000.00 in the funds.
FINRA also stated that Thompson did not perform due diligence on ABC Company’s promissory notes because he failed to read or request any of ABC’s financials or otherwise attempt to understand the way in which ABC intended on producing income and paying back holders of promissory notes. A customer of Alexander Capital was nonetheless advised by Thompson to invest $600,000.00 in the notes. Three of four notes had been purchased by the customer on margin. Thompson did not reasonably grasp the risks of margin.
Thompson also recommended Regulation D offerings without developing an understanding of their risks and features. The AWC stated that a customer was steered by Thompson towards investing $1,150,000.00 in equities and debt instruments issued by a wireless audio technology company through a Regulation D offering. FINRA determined that Thompson’s recommendations were unsuitable given his lack of understanding of risks and features.
FINRA also stated that between August of 2015 and March of 2017, forty trades were placed by Thompson in the account of an Alexander Capital customer on a discretionary basis. There was no written authorization provided by the customer to warrant Thompson’s exercise of discretion. FINRA determined that Thompson’s conduct was violative of FINRA Rules 2010 and National Association of Securities Dealers (NASD) Rule 2510(b). FINRA Public Disclosure reveals that Thompson has been identified in two customer initiated investment related disputes concerning accusations of his misconduct while registered with Merrill Lynch.
Particularly, a customer filed an investment related complaint pertaining to Thompson’s conduct where the customer sought unspecified damages based upon accusations of bad investment advice on private equity products. Also, Thompson is the subject of a customer initiated investment related written complaint which has been resolved for $33,623.67 in damages based upon accusations of Thompson’s failure to follow the customer’s mutual fund instructions.