Joshua David Stamm, of Lynchburg, Virginia, a stockbroker formerly registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated, has been fined $10,000.00, prohibited from working in a supervisory capacity, and placed on heightened supervision based upon a Virginia State Corporation Commission Division of Securities Order containing allegations that Stamm engaged in outside business activities without apprising his firm. Case No. SEC-2016-00053 (Jan. 11, 2017).
According to the Order, a customer was assisted by Stamm in the administration and drafting of promissory notes which the customer’s company issued, where the notes were neither exempt from registration, nor ever registered. The notes were reportedly sold to at least one firm customer.
The Division alleged that Stamm never notified Merrill Lynch or gained the firm’s approval before he partook in the activity involving the promissory notes. Additionally, the sales activity which Stamm engaged in failed to be placed on the records and books of his firm. Consequently, Stamm’s conduct was alleged by the Division to be violative of 21 VAC-5-20-280 B(2).
FINRA Public Disclosure reveals that Merrill Lynch, Pierce, Fenner & Smith terminated Stamm on June 29, 2016, based upon allegations that Stamm provided assistance to a customer for credit arrangements outside the auspices of the firm, and effected private securities transactions involving direct investment programs.
Additionally, Public Disclosure reveals that on June 4, 2008, a customer filed an investment related written complaint involving Stamm’s conduct, based upon allegations that Stamm, while associated with UBS Financial Services Inc., misrepresented auction rate securities as having certificate of deposit characteristics and stated to the customer that the securities were safe, liquid, and would provide the customer with a seven percent guaranteed return on a monthly basis.
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