Lev Slootsky, of New York, New York, a stockbroker with Goldman, Sachs & Co., was fined $15,000.00 and suspended for one year from associating with any Financial Industry Regulatory Authority (FINRA) member firm in any capacity after consenting to findings that he engaged in unauthorized private securities transactions and outside business activities. Letter of Acceptance, Waiver and Consent, No. 2014040542601(Feb. 29, 2016).
According to the AWC, from May 2013 through December 2013, Slootsky engaged in private securities transactions which consisted of an oil well project, JMB Oil Project, as well as two limited liability companies, BM V and BM II, which were focused in debt investments pertaining to real estate.
The AWC stated that on July 2, 2013, Slootsky and another investor, CH, formed an investment vehicle, EL, in order to generate investments in JMB. The AWC indicated that Slootsky, CH, as well as other investors in company, EO, were labeled as managers of EL.
The AWC indicated that in return for a 9.8 percent stake in JMB’s equipment and property leases, via fractional and undivided working interests (securities), EO had invested $204,857.00. EL reportedly made additional contributions into the JMB project on August 19, 2013, where Slootsky made a personal contribution of $13,299.00 in exchange for 0.5% of the aforementioned working interests. The AWC stated that Slootsky made another capital contribution of $4,835.00 in JMB after a second capital call was made on December 17, 2013.
According to the AWC, Slootsky acted in the capacity of various investors’ representative with respect to the JMB arrangement by ascertaining and analyzing investment information; attending investment meetings and calls; and participating in the due diligence process associated with the JMB oil well.
The AWC further reported that in 2013, Slootsky purchased $100,000.00 worth of securities, via membership interests, in BM V and BM II. Apparently, BM V raised an estimated $2,625,000.00, while BM VII raised an estimated $715,000.00 – both via senior secured debt.
Slootsky reportedly never notified Goldman Sachs about his participation in the aforementioned transactions as he was required to do. Slootsky was found to have violated FINRA Rule 2010 and NASD Rule 3040 as a result of his unauthorized private securities transaction.
The AWC further indicated that Slootsky participated in outside business activities without providing Goldman Sachs with written notification and gaining approval for such activities before engaging in them. Specifically, FINRA noted Slootsky’s participation in EL, where Slootsky had acted on behalf of investors to facilitate their purchases in JMB. Slootsky reportedly transmitted information to managers of EL regarding other potential investments in addition to JMB, where he engaged in active discussions with such managers regarding the investments. FINRA found that Slootsky’s failure to notify his firm and gain their approval regarding his other outside business activities was violative of FINRA Rule 3270.
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