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Jon L. Cox, a Stockbrokerwith LPL Financial, was permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member after consenting to findings that he failed to cooperate with a FINRA investigation into allegations that Cox had violated his firm’s policies concerning outside business activities. Department of Enforcement v. Jon L. Cox, No. 2014040234701 (Apr. 1, 2015). FINRA has barred Cox from acting as a broker or otherwise associating with firms that sell securities to the public.
According to the Decision, Cox was associated with LPL from May, 2001 – January, 2014. LPL filed a Form U5 (Uniform Termination Notice for Securities Industry Registration) which stated that Cox was terminated by discharge for violating their policy concerning outside business activities.
The Decision indicated that FINRA had initially attempted to retrieve information concerning the incident from Cox, pursuant to Rule 8210, but was unsuccessful due to Cox’s failure to respond. The AWC noted that FINRA’s Department of Enforcement then filed a Complaint, pursuant to Rules 9131 and 9134, on November 25, 2014. Cox did not respond to two separate notices to the Complaint, resulting in the default Decision.
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.
FINRA registered representatives like Cox 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 equitable principles of trade.
Public disclosure records reveal that Cox has been subject to five disclosure incidents. On April 1, 2002, Cox settled a customer dispute for $65,825.00 after customers alleged that Cox’s recommendation for variable annuity investment(s) were unsuitable, and that Cox misrepresented that the principal investment was protected.
On January 13, 2004, Cox settled a customer dispute for $51,593.51 after a customer alleged that he was assured that the variable annuity contract he purchased would provide a seven percent guaranteed death benefit. On November 10, 2011, Cox became subject to a civil judgment in the amount of $94,686.39.
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.