Daniel S. Miller, of San Francisco, California, a stockbroker with Growth Capital, was fined $5,000.00 and suspended for six 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. 2015044394701 (May 26, 2016).
According to the AWC, while Miller was associated with Growth Capital, he disclosed to his firm that the was involved in outside business activities with two affiliated entities involved in generating investments, via crowdfunding, for projects in real estate. Apparently, Miller served as the entities’ treasurer and secretary, and ultimately the entities’ president by April of 2014.
The AWC stated that from April 2014 through July 2014, preferred shares of one of the affiliates were offered to investors via a private offering. Apparently, Miller’s responsibilities, from April 15, 2014 through June 4, 2014, included soliciting interest from prospective investors and providing them with term sheets.
The AWC reported that Miller generated $560,000.00 via four investors who were contacted regarding the private offering. FINRA noted; however, that the investors were not contacted through Miller’s employment arrangement with Growth Capital. Apparently, Miller never notified Growth Capital in writing, nor obtained the firm’s approval to engage in the aforementioned securities transactions with investors.
The AWC stated that Growth Capital’s supervisory procedures specifically prohibited individuals such as Miller from effecting private securities transactions outside the scope of employment unless notification was provided and permission was granted by the firm. FINRA found Miller to have violated FINRA Rules 2010 and NASD Rules 3040 for engaging in unauthorized private securities transactions.
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