Brody Ralph Bray of Atlanta, Georgia, a stockbroker registered with American Portfolios Financial Services 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 because Bray engaged in an undisclosed outside business activity. Letter of Acceptance, Waiver, and Consent No. 2021072323701 (May 26, 2023).
According to the AWC, in a Uniform Notice of Securities Industry Registration (Form U5) dated August 18, 2021, American Portfolios disclosed that Bray resigned voluntarily once the firm received an inquiry from a state regulator about his potential undisclosed business activity.
FINRA noted that between October of 2019 and August of 2021, American Portfolios had a rule that required stockbrokers to get written authorization from the securities broker dealer before taking part in an outside business activity. In June of 2019, Bray created a limited liability company (LLC) in Nevada. Although Bray was the only manager of the LLC, he failed to inform American Portfolios in writing when he joined the firm in October 2019.
FINRA stated that in January of 2021, Bray started working as an independent contractor for Company A. He was a market strategist and gave commentary and trade analysis to Company A’s subscribers. Bray received $77,500 in payment from Company A from April of 2021 to August of 2021. However, Bray did not inform American Portfolios in writing about his involvement with Company A.
In July of 2021, Bray established a different LLC in Georgia without informing American Portfolios in writing. Bray was the registered agent, manager, and organizer of the LLC. Bray executed his activities related to Company A using a different name, and in December 2020, he falsely confirmed on a compliance questionnaire that he did not take part in undisclosed outside business activities.
As a result, Bray violated FINRA Rules 2010 and 3270.
The AWC also stated that the investment-related content created by Bray and shared in his outside business activity to subscribers of Company A from January of 2021 to August of 2021 was considered retail communications because it was made available to greater than 25 retail investors inside of a 30-day period. FINRA stated that Bray’s communications with Company A’s subscribers contained misleading statements concerning the trading of Company A, misleading and unjustified statements about its commission-free model, and misleading or exaggerated claims concerning the company as well as its traders.
For instance, Bray’s communications with Company A’s subscribers concerned specific securities or stocks as trades they were currently buying or making in the stock market, or positions that Company A held. The regulator found that these communications were misleading, as they implied Company A was buying and selling securities when the company did not have a brokerage account and did not engage in any securities transactions.
Since the company made trades into a software program that tracked performance of its hypothetical stock portfolio, Bray’s communications that described the company’s positions as realized and profitable were unwarranted, according to the AWC. FINRA stated that Bray’s communications inviting subscribers to commission-free or trade-fee-free were also misleading and unwarranted because Company A did not provide the opportunity for subscribers to open fee-free trading accounts or facilitate fee-free trading.
Company A’s experience and expertise were promoted through Bray’s communications. His communications also detailed subscriber returns or success. For instance, two communications described the company as Wall Street’s best trading team and as Bray being the best trader alive. Another claim stated that the company’s subscribers were earning returns ranging from 30 percent to 100 percent. These statements were misleading, unwarranted, and exaggerated, as Company A had no knowledge of what its subscribers earned with any information received by them. Additionally, because Bray and the others registered with Company A never publicly revealed their identities, subscribers had no way to assess the accuracy of the claims about their expertise and track record.
Therefore, Bray violated FINRA Rules 2010 and 2210(d)(1)(B).
Public Disclosure shows that Bray is also referenced in a customer initiated investment related complaint filed on August 12, 2013, in which the customer requested compensatory damages based upon allegations that Bray recommended options, oil and gas investments, futures, and commodities which poorly performed when Bray was registered with The Strategic Financial Alliance Inc. The securities broker dealer closed out the complaint without a resolution.
On December 27, 2018, a customer initiated investment related FINRA securities arbitration claim involving Bray’s conduct was settled for $100,000.00 in damages based upon allegations that Bray made misrepresentations and omissions of material fact, made unsuitable recommendations of direct investments, and committed fraud. FINRA Arbitration No. 17-03331.
Bray was registered with American Portfolios Financial Services Inc. as a stockbroker between October 28, 2019, and August 18, 2021. He was registered with The Strategic Financial Alliance as a stockbroker between June 14, 2010, and October 28, 2019.
