James E. Scott, a registered representative with FSC Securities Corp., was permanently barred from associating with any Financial Industry Regulatory Authority in any and all capacities via terms of an Order Accepting Offer of Settlement containing allegations that Scott had aided and abetted an individual in the sale and recommendation of certain unauthorized securities transactions, shared $45,700 in commissions with the individual, and provided false information to FINRA staff concerning the nature of his relationships with the individual during the period in which FINRA was investigating such conduct. Department of Enforcement v. James E. Scott, No. 2013035723501.
The Order Accepting Offer of Settlement indicated that from April, 2012 – December, 2012, Scott, aware of his actions, substantially aided and abetted a long-time sales assistant, RO, in the course of recommending securities in the state of Texas when RO was not actually registered there. Scott was found to have repeatedly assisted RO in representing himself as a securities broker, in that he helped Scott with seminars for RO to utilize in soliciting business from potential and current clients. The Order also indicated that Scott would help RO in execution of trades for clients he helped solicit. FINRA found Scott to have violated Section 15(a)(1) of the Securities Exchange Act of 1934 and FINRA Rule 2010.
The Order indicated that RO, an individual who was associated with ten different FINRA/NASD firms, was barred from associating with any FINRA member firm in any capacity by terms of the Order Accepting Offer of Settlement from February, 2014, which contained charges of RO’s outside business activities, false testimony to FINRA, and improper loans to customers.
According to the Order, from June 14, 2012 – August 9, 2012, Scott had shared a minimum of $45,700 in commissions with RO during the time that RO was not registered in Texas (or even with FINRA). Scott was found to have violated FINRA Rule 2010 and NASD Conduct Rule 2420 in this regard.
The Order further stated that Scott provided false information to FINRA staff members in in an on-the-record testimony with them on April 17, 2013. Scott was found to have testified falsely with respect to claiming that RO had not played any material part in the seminars to clients for solicitation, testified falsely regarding RO’s conduct in providing recommendations for investments and securities to clients, and falsely testified regarding Scott’s participation in executing transactions that RO had prepared and recommended. Because Financial Industry Regulatory Authority found that Scott’s lies were material to their investigation, he was found to have violated Rules 8210 and 2010.
Section 15(a)(1) of the 1934 Act is violated, as in the case with RO, when an individual makes use of the mails or any means or instrumentality of interstate commerce to effect transactions in, or to induce or attempts to induce the purchase or sale of, securities despite the fact that he/she is not an associated person of a broker or dealer as that term is defined by Section 3(a)(18) of the 1934 Act, or permitted to engage in securities pursuant to Section 15(b) of the 1934 Act.
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.
