Daniel Kasbar of Hollywood, Florida, a registered representative with LPL Financial, LLC, was permanently barred from association with any Financial Industry Regulatory Authority (FINRA) member firm in any capacity after consenting to findings that he failed to cooperate with a FINRA investigation into allegations that Kasbar engaged in undisclosed outside business activities. Letter of Acceptance, Waiver and Consent, No. 2015045744901 (Nov. 11, 2015). Public disclosure records reveal that LPL Financial, LLC discharged Kasbar for engaging in an outside business activity beyond the scope of the firm’s approval, without adequately disclosing the nature of such activity in violation of firm policy.
According to the AWC, FINRA had launched an investigation into allegations that Kasbar, between 2010 and 2015, had engaged in outside business activities beyond the scope of approval provided by two of his former FINRA member employers, HD Vest and LPL. The AWC stated that on September 17, 2015, FINRA, acting pursuant to Rule 8210, requested that Kasbar provide documents and information regarding such outside business activities.
The AWC stated that Kasbar did not provide FINRA with their requested information and documentation by the September 24, 2015 deadline. Kasbar’s counsel eventually got in touch with FINRA’s staff on October 5, 2015, where counsel communicated that Kasbar acknowledged that he received FINRA’s request but that he was not going to cooperate by providing the requested information and documentation at any point. Consequently, FINRA found Kasbar’s conduct to be in violation of Rules 8210 and 2010, leading to his permanent bar.
FINRA registered representatives like Kasbar who do not cooperate with FINRA’s investigations often face a permanent bar from practicing in the securities industry as such lack of cooperation violates FINRA’s Rule 8210 – requiring that no member or person shall fail to provide information or testimony or permit an inspection and copying of books, records, or accounts pursuant to the rule. FINRA typically accompanies a Rule 8210 violation with a Rule 2010 violation when individuals, according to FINRA, do not appear to observe high standards for commercial honor and just and just and equitable principles of trade.
According to FINRA Rule 3270, FINRA’s position is that no registered person like Kasbar may be an employee, independent contractor, sole proprietor, officer, director or partner of another person, or be compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his/her member firm, unless he/she is provided prior written notice to the member. Selling away, also known as private securities transactions or undisclosed outside business activities, occurs when a stockbroker engages or participates in the sale of securities to investors outside of the formal approval of the securities firm with whom they are associated.
Selling away, also known as private securities transactions or undisclosed outside business activities, occurs when a stockbroker engages or participates in the sale of securities to investors outside of the formal approval of the securities firm with whom they are associated.
As a general matter, stockbrokers are only permitted to engage in the solicitation or sale of investments and investment related products approved by their firm. However, quite frequently, stockbrokers solicit, participate, or directly engage in the sale of typically unregistered securities or investments without the approval and outside of the auspices of their firm. These investments may take on many forms, and may include the recommendation of an outside money manager, or a hedge fund, which may sometimes turn out to be a Ponzi scheme. Sometimes these outside investments may include off-shore securities, insurance trusts, stocks or ownership interests in small businesses, startup ventures, corporate debentures, mortgage notes, private placements, promissory notes, oil & gas interests, real estate partnerships, pre-IPO shares, and a variety of other investments.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
