Jason Daniel Sayles of St. Petersburg, Florida, a stockbroker with Genworth and Cetera Financial Services, LLC, was fined $15,000 and suspended for ten months by Financial Industry Regulatory Authority (FINRA) from associating with a FINRA member in any and all capacities after consenting to findings that he engaged in undisclosed outside business activities and private securities transactions. Letter of Acceptance, Waiver and Consent, No. 2013037390601 (Jan. 21, 2016).
According to the AWC, from June 2010 through June 2013, Sayles helped clients of a CPA firm, H&H, open and manage self-directed IRA accounts. Sayles was reportedly hired by H&H in December 2007 in the capacity of Director of Operations. The AWC stated that since Sayles was associated with Genworth, he was responsible for indicating his involvement with H&H to Genworth as an outside business activity. Although Sayles notified Genworth, it was not until approximately four years after he had been engaging in H&H business. Further, Sayles reportedly misidentified his job title and duties, claiming that the business involved tax planning and preparation and Sayles held office manager duties.
The AWC reported that at least fifteen of Sayles’ H&H customers were additionally clients of Genworth/Cetera. An estimated $1,800,000 in cash and assets was transferred, via eight of the customers, from their firm accounts into the aforementioned self-directed IRA accounts. Most of Sayles? customers invested in securities within the self-directed IRAs.
According to the AWC, notwithstanding Cetera instructing Sayles to stop engaging in the aforementioned conduct, Sayles persisted with such conduct for at least three more months. FINRA found Sayles to have crossed the line regarding the permission he was provided by Genworth to engage in H&H outside business considering the nature of H&H’s business and Sayles? previously stated role.
The AWC further identified that Sayles failed to disclose his involvement in other outside business activities which he was involved in from April 2012 through February 2015. In the case with one entity that Sayles was actively involved with, he was deemed a manager and owner and could sign on behalf of the company. In another case, he was actively involved with another company as the company?s president. Sayles reportedly failed to follow Genworth/Cetera?s firm procedures which called for Sayles to provide written disclosure to Genworth/Cetera of his outside business activities. FINRA found Sayles conduct to be in violation of NASD Rules 2110 and 3030, FINRA Rule 2010 and NASD Rule 3030, and FINRA Rule 3270 in this regard.
Sayles was also found to have engaged in twelve private securities transactions pertaining to customers’ IRAs, involving an estimated $2,300,000 of customer funds between June 2010 and June 2013. The AWC indicated that Sayles’ involvement included processing paperwork and implementing strategies associated with H&H customers’ tax and investment matters. Regarding such strategies, Sayles reportedly effected purchases of a privately held corporation, promissory notes, and private placements. The AWC indicated that Sayles’ participation in these transactions, which were not executed through Genworth/Cetera, was supposed to have been disclosed in writing to Genworth/Cetera. FINRA found that Sayles’ failure to report his participation was violative of FINRA Rules 2010 and 3040.
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