Christopher M. Hawn, of Denver, Colorado, a stockbroker formerly registered with SC Distributors, LLC, and ALPS Distributors, Inc., has been fined $10,000.00 and suspended for six months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Hawn, inter alia, engaged in unauthorized outside business activities and private securities transactions. Letter of Acceptance, Waiver and Consent, No. 2015046760801 (June 13, 2017).
According to the AWC, from September of 2012 to October of 2012, during the point Hawn was associated with SC Distributors, LLC, two securities transactions were facilitated by him away from his firm. Apparently, these transactions involved $98,980.00 of investment contributions in a private placement offering made by two customers, JK and BT, after Hawn solicited the investments.
Hawn evidently made recommendations to the customers regarding the private placement offering, and furnished information to the customers about the investment opportunity which consisted of an information memorandum, marketing documents, and subscription materials. Apparently, customer JK was invited by Hawn to take part in a discussion that the private placement offering promoters hosted. The AWC stated that Hawn omitted from the firm all of these activities concerning the private placement offering. Consequently, FINRA found Hawn’s conduct to be violative of FINRA Rules 2010 and NASD Rule 3040.
The AWC further revealed that the marketing documents and memorandum concerning the private placement offering lacked details about the risks of investing, which prevented financial details from adequately being evaluated by the customers prior to making the investments. Projected financial returns were reportedly communicated to customers; however, the forecasts lacked details about the risks or information that the projections were founded upon. FINRA concluded that Hawn’s conduct in this regard was violative of FINRA Rule 2010 as well as NASD Rule 2210(d)(1)(A).
Moreover, from July of 2013 to August of 2015, during which point he was associated with ALPS Distributors, Inc., Hawn became a consultant for an investment advisor entity, LCM. Particularly, a consulting contract was entered into by Hawn with the company, where he was responsible for referring investors to the investment advisor while additionally serving as a committee member. Yet, neither of these activities were made known to ALPS by Hawn. As a result, the firm never authorized the activities. Hawn’s conduct was found by FINRA to be violative of FINRA Rules 2010 and 3270. FINRA also found Hawn to commit a violation of FINRA Rule 2010 for falsifying questionnaires administered to him by his firm in reference to his private securities transactions and outside business activities.
FINRA Public Disclosure reveals that Hawn’s registration with ALPS Distributors, Inc. was terminated on August 10, 2015, based upon allegations that he failed to disclose his outside business activities.
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