Sheldon Harber of St. Louis, Missouri, a stockbroker with Cambridge Investment Research, Inc., was fined $10,000 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he engaged in unauthorized private securities transactions. Letter of Acceptance, Waiver and Consent, No. 2014042539101 (Jan. 20, 2016).
According to the AWC, from January 2013 through August 2014, Harber took part in private securities transactions through his participation of investing funds in a private company, Aisle411, Inc., where Harber made his own investment along with assisting six other investors in making contributions as well. The AWC stated that Harber pooled investor funds and purchased shares in Aisle411 via forming Aisle411 Partners, Inc. along with one of the firm’s customers. In total, $435,000 was contributed into the company via Aisle411 Partners, Inc.
The AWC indicated Harber would arrange and take part within meetings pertaining to the investment in the company; provided investors with advice on contribution amounts; and endorsed the private company via communications on a personal and public level. Further, Harber reportedly took part in helping foster communications between the investors and the company, and sent the company’s marketing and offering documentation material to the Aisle411 Partners members. The AWC stated that Harber even executed purchase agreements and promissory notes on Aisle411 Partners’ behalf.
FINRA found Cambridge was never notified in writing by Harber prior to his involvement with Aisle411. The AWC indicated Cambridge had not been notified by Harber regarding his facilitation of the six investors’ funds. FINRA found that Harber, by not providing written notice of his aforementioned conduct, violated FINRA Rule 2010 and NASD Rule 3040.
Public disclosure records reveal that Harber has been subject to three disclosure incidents. On October 12, 2006, Harber was fined $10,000 and suspended for two years from in a supervisory capacity within a broker/dealer or investment advisor after Harber consented to findings that he made unsuitable recommendations to residents of Missouri which involved investors mortgaging their homes in order to increase the amount of investable assets. Missouri’s Secretary of State additionally prohibited Harber from making certain investment recommendations in the future which involved procurement of investor assets via mortgaging homes. Also on October 12, 2006, in reference to Harber’s misconduct involving investor mortgages, Harber settled with the Missouri State Securities Disvision or $56,000 to be paid to the Missouri Investor Restitution Fund.
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