Ryan Nicholas Paugh, of Independence, Ohio, a stockbroker registered with J.P. Morgan Securities LLC, has been fined $10,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based on allegations against Paugh of selling away from J.P. Morgan. Letter of Acceptance, Waiver and Consent, No. 2015046604801 (Oct. 2, 2017).
According to the AWC, from December of 2012 to November of 2013, during the time that Paugh was employed with J.P. Morgan Securities, LLC, he facilitated private securities transactions without informing the firm and gaining its authorization. Particularly, he solicited five investors’ purchases of $48,500.00 in securities outside his firm’s auspices, where two of the investors were customers of J.P. Morgan Securities, LLC. Apparently, Paugh discussed details of the offering with customers, and arranged customers’ payments of funds in the securities transactions.
The AWC revealed that Paugh was prompted by his firm in 2013 and 2014 to disclose any private securities transactions; however, he failed to provide information such as his role or the details of the transactions. Moreover, Paugh purportedly falsely attested to his activities in the course of completing compliance questionnaires administered to him by J.P. Morgan Securities. FINRA found that by selling away from his firm, Paugh’s conduct was violative of FINRA Rules 2010 and NASD Rule 3040.
FINRA Public Disclosure reveals that on August 5, 2015, Paugh was fired by J.P. Morgan Securities, LLC, based upon accusations that he solicited investments for unapproved outside business activities. Additionally, on February 4, 2016, a customer initiated investment related written complaint involving Paugh’s conduct was settled for $5,000.00 in damages supported by allegations that he made improper direct investment product recommendations.
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