John Thomas Oates, Jr., a Stockbroker with Cetera Financial Specialists LLC, was suspended from association with any Financial Industry Regulatory Authority (FINRA) member in any and all capacities for six months and fined $10,000 after consenting to findings that Oates engaged in outside business activities in violation of his firm’s policies. Letter of Acceptance, Waiver, and Consent, No. 2013036612701 (Oct. 2, 2015).
According to the AWC, from around March, 2011 – October, 2011, at a time when Oates was registered with his firm, he had participated in the purchase of roughly $1,400,000.00 in alternative investment products with a customer of his firm in addition to another non-firm individual. In connection with Oates’ involvement with transaction, he was compensated in the amount of approximately $69,000.00. The AWC indicated that Oates had engaged in the outside business activity despite not providing Cetera with prior written notice. FINRA found that Oates’ conduct violated Rule 2010 and 3270 in this regard.
Selling away, also known as private securities transactions or undisclosed outside business activities, occurs when a stockbroker engages or participates in the sale of securities to investors outside of the formal approval of the securities firm with whom they are associated.
As a general matter, stockbrokers are only permitted to engage in the solicitation or sale of investments and investment related products approved by their firm. However, quite frequently, stockbrokers solicit, participate, or directly engage in the sale of typically unregistered securities or investments without the approval and outside of the auspices of their firm. These investments may take on many forms, and may include the recommendation of an outside money manager, or a hedge fund, which may sometimes turn out to be a Ponzi scheme. Sometimes these outside investments may include off-shore securities, insurance trusts, stocks or ownership interests in small businesses, startup ventures, corporate debentures, mortgage notes, private placements, promissory notes, oil & gas interests, real estate partnerships, pre-IPO shares, and a variety of other investments.
Public disclosure records reveal that Cetera Financial had permitted Oates to resign on June 15, 2014, in connection with allegations of violating investment-related statues, regulations, rules or industry standards of conduct.
Oates is also subject to a pending customer dispute form March 22, 2013, concerning allegations of violations of the Arkansas and Pennsylvania Securities Act, Arkansas Deceptive Trade Practices Act, violation of Pennsylvania Unfair Trade Practices and Consumer Protection Law, in addition to claims of breach of contract, fraud, negligent supervision, breach of fiduciary duty, civil conspiracy and/or aiding and abetting in connection with the assignments of pensions being marketed and sold in violation of the law. Plaintiffs alleged that the marketed pension assignments were securities that were required to be registered, and that information provided regarding securities were untrue.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
