Brian Keith Jones of Pilot Grove, Iowa, a stockbroker registered with Cambridge Investment Research Inc., has been fined $5,000.00 and suspended for 45 days from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Jones was “selling away.” Letter of Acceptance, Waiver, and Consent, No. 2023078431201 (March 27, 2024).
According to the AWC, FINRA’s action against Jones stemmed from a review of a disclosure made by Cambridge Investment Research Inc. on April 10, 2023. This disclosure reported that Jones was fined by the securities broker dealer for selling an unapproved product to two customers on December 29, 2020.
FINRA noted that under Rule 3280, before engaging in any private securities transaction, the stockbroker is required to provide their firm with written notice detailing the transaction and their role in it. Jones had been facilitating investments in a private placement offering without the securities broker dealer’s approval, leading to a violation of both FINRA Rules 3280 and 2010.
While associated with Cambridge, Jones also worked with a Cambridge-affiliated investment adviser. In December 2020, he recommended and facilitated $50,000.00 worth of investments in a private placement offering for two of his advisory customers. These investments were not approved by Cambridge or the adviser for sale to customers. Jones researched the investments, recommended shares, and facilitated transactions without disclosing his involvement to Cambridge or seeking approval, earning advisory fees from these investments.
Cambridge’s policies prohibited representatives from taking part in private securities transactions without prior notification and approval from the compliance department. Despite this, Jones failed to disclose his participation in these transactions at the time they occurred. Additionally, he falsely denied involvement in any private securities transactions on his 2021 annual compliance questionnaire, only to admit his participation in the 2020 transactions in his 2022 questionnaire.
Jones has been associated with Cambridge Investment Research Inc. in Pilot Grove, Iowa, and Cambridge Investment Research Advisors Inc. in Mount Pleasant, Iowa, since October 20, 2018.
