Brian James Egan, of Laguna Niguel, California, a stockbroker with Independent Financial Group, LLC, was permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member after consenting to findings that he failed to disclose outside trading accounts, made misrepresentations to his firm, and obstructed a FINRA investigation into allegations of his misconduct. Letter of Acceptance, Waiver and Consent, No. 2015046381101 (Aug 2, 2016).
According to the AWC, from April of 2010 through July of 2015, while associated with Independent Financial Group, Egan had maintained trading authority in eighty-seven brokerage accounts, sixty of which were associated with Firm A (an outside firm). Apparently, Egan had maintained the accounts, consisting of customers of Egan’s tax business and customers who were members of his family, prior to joining Independent Financial Group.
The AWC stated that Egan never notified his firm of the aforementioned trading authority he maintained when joining Independent Financial Group, or at any point thereafter. Apparently, throughout the aforementioned time frame, he had exercised his trading authority in the aforementioned customer accounts, in which he traded and transferred monies and customers’ securities to his own Firm A accounts.
The AWC reported that Egan falsely attested to six of Independent Financial Group’s compliance questionnaires between 2010 and 2015, in which he had certified to Independent Financial Group that all of his personal trading accounts were disclosed that were held outside the auspices of his firm. FINRA found that such certifications were false as Egan did not make mention of the eighty-seven aforementioned Firm A accounts in which he had controlled and/or owned.
The AWC further stated that FINRA requested in April through June of 2016 that Egan provide FINRA with information and documentation in connection with allegations of his misconduct. Apparently, Egan did not respond to FINRA’s requests on multiple occasions, and provided false information in connection with one of his responses.
Particularly, the AWC noted that on April 7, 2016, Egan received a FINRA request for information and documentation to be produced, per FINRA Rule 8210, by a deadline of April 21, 2016. Egan never responded to the request. FINRA reportedly informed Egan on April 28, 2016, that he was in violation of FINRA Rule 8210 for failing to respond, and again requested that Egan provide the requested details to FINRA by May 13, 2016.
FINRA, according to the AWC, extended the time frame for Egan to respond to May 31, 2016 based upon Egan’s request for such. However, on May 31, 2016, Egan merely provided FINRA with a response consisting of one page, in which it lacked the information and documentation that FINRA requested. Egan, in his letter to FINRA, apparently claimed that he had not maintained trading authority for the Firm A accounts. FINRA deemed that Egan’s statement in this regard was false.
FINRA found that Egan’s failure to provide his firm with the requisite information regarding his Firm A accounts was violative of violative of FINRA Rules 2010 and NASD Rule 3050(c). FINRA also found that Egan’s misrepresentations to his firm on their compliance questionnaires was violative of FINRA Rules 2010. Finally, FINRA found that Egan’s failure to cooperate in the FINRA investigation into his misconduct, and false information provided to FINRA in connection with their investigation into such allegations, was conduct violative of FINRA Rules 2010 and 8210.
Prior to the FINRA disciplinary action, Independent Financial Group terminated Egan on July 28, 2015, amid allegations of Egan’s failure to disclose his trading accounts that he held and maintained trading authority over which were outside of the firm’s auspices, in violation of his employer’s policies.
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