James Craig Etter, of Austin, Texas, a stockbroker formerly registered with NatAlliance Securities LLC, was the subject of a regulatory action initiated by Financial Industry Regulatory Authority (FINRA) on November 12, 2024. This action stemmed from violations of FINRA Rules 3280, 3270, and 2010, which pertain to “private securities transactions,” outside business activities, and the obligation to maintain high standards of commercial honor. Etter consented to the sanctions without admitting or denying the findings. Letter of Acceptance, Waiver, and Consent No. 2023078596901.
According to the AWC, between August 2021 and May 2022, Etter solicited investments totaling $110,000.00 from two investors through three promissory notes issued by an entity he founded and controlled. These transactions were not disclosed to his employing firm, NatAlliance Securities LLC, as required under FINRA Rule 3280. The firm’s policy prohibited such transactions unless they were approved by senior management. Etter actively participated in these transactions by soliciting investments, addressing investor inquiries, and handling investment documents and funds. Despite the investors receiving their funds back, Etter inaccurately reported on a 2023 compliance questionnaire that he had not engaged in private securities transactions during the prior 12 months. FINRA determined these actions violated both Rule 3280 and Rule 2010.
Additionally, from April 2022 to April 2023, Etter engaged in an undisclosed outside business activity, providing business development and due diligence services for a solar equipment company. He received approximately $66,000.00 in compensation for this work. This activity was not disclosed to NatAlliance, violating FINRA Rule 3270. Firm policy required stockbrokers to submit prior written notice and obtain approval before engaging in any outside business activities. Etter’s failure to disclose this activity further violated Rule 2010.
As part of the resolution, Etter accepted a four-month suspension from associating with any FINRA member in all capacities, beginning November 18, 2024, and ending March 17, 2025. Additionally, he was fined $10,000.
Etter’s actions were disclosed following an internal review by NatAlliance, which prompted his voluntary resignation on April 20, 2023.
