Arthur J. Smithee Junior, of Orem, Utah, a stockbroker formerly registered with LPL Financial LLC, has been fined $10,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he engaged in unapproved outside business activities and sold securities to customers outside the auspices of LPL Financial. Letter of Acceptance, Waiver and Consent, No. 2015044115601 (Apr. 25, 2017).
According to the AWC, between October of 2008 and February of 2014, services had been rendered by Smithee to two outside business activities that Smithee previously disclosed to LPL Financial LLC and which he had been approved for. Particularly, Smithee claimed to his firm that his outside activities involved providing sales and consulting technology based services. However, the activities that Smithee engaged in were found by FINRA to have been managerial in substance, and his daily activities in this regard were outside the scope of permission that LPL Financial previously granted to Smithee.
The AWC revealed that from February of 2009 to January of 2015, two additional outside business activities were pursued by Smithee, where he managed a consulting entity and took part in an LLC which held real estate. Yet, the firm’s yearly compliance questionnaires were apparently not completed by Smithee to account for his activities; he claimed to have apprised the firm of all his outside business activities when he had not. FINRA found Smithee’s conduct to have been violative of FINRA Rules 2010, 3270, and NASD Rules 2110 and 3030.
Moreover, the AWC stated that Smithee facilitated a private securities transaction involving a $150,000.00 purchase of a publicly traded company’s stock. Evidently, the transaction was steered by Smithee, where he met with the individual who the transaction was structured by. Smithee apparently failed to apprise LPL Financial of his involvement; conduct which FINRA found to be violative of FINRA Rule 2010 and NASD Rule 3040.
FINRA Public Disclosure reveals that Smithee was terminated by LPL Financial LLC in December of 2014 based upon allegations of his misconduct cited in FINRA’s disciplinary action against Smithee.
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