Michael Anthony Tavel of Indianapolis Indiana a stockbroker formerly registered with LPL Financial LLC has been fined $20,000.00 and suspended for 18 months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings of Tavel selling away from LPL Financial and making unsuitable investment recommendations while registered with the securities broker dealer. Letter of Acceptance Waiver and Consent No. 2019062350301 (Dec. 17, 2020).
According to the AWC, in August of 2017, a private placement issuer who was in the business of making commercial loans had enlisted Tavel to serve as its placement agent. One of Tavel’s customers at LPL named RK was provided with marketing materials from Tavel that detailed the investment in the issuer. The customer made a $25,000.00 investment in a promissory note allowing Tavel to receive commissions. The issuer and chairman were subsequently charged with fraud by Securities and Exchange Commission (SEC). RK lost all of their money that was invested in this issuer.
The AWC stated that in June of 2018, an oil-extraction company had enlisted Tavel to be its placement agent. Tavel explained to LPL customers how the investment in the oil-extraction company worked and he persuaded at least two customers to invest in that company. The regulator noted that on November 2, 2018, one customer invested $200,000.00. On February 7, 2019, another invested $40,000.00. The stockbroker received $19,700.00 in commissions for his sales efforts.
Tavel did not have permission from LPL Financial to effect those sales away from the securities broker dealer. He violated FINRA Rules 2010 and 3280 in this regard.
The stockbroker also made unsuitable investment recommendations to customers. The regulator indicated that Tavel merely reviewed the first issuer’s marketing materials. He did not conduct adequate due diligence before advising the customer to make a $25,000.00 investment in the issuer. The AWC stated that the investment in that lender was inappropriate given the elderly customer’s objectives and conservative risk tolerance. FINRA found that Tavel’s recommendations were violative of FINRA Rules 2010 and 2111.
The AWC stated that Tavel made misleading statements regarding the lender. The stockbroker made it seem in documents provided to RK that Tavel was an investor in that issuer. He was never invested in the issuer. Tavel violated FINRA Rule 2010 for misrepresenting his status as one.
Tavel also tried to settle a customer dispute away from the securities broker dealer. He received a complaint from RK in February of 2019Tavel tried to pay RK for their losses in return for RK taking back their complaint. LPL Financial settled with the customer in March of 2019. In that dispute, the customer made allegations of misrepresentation and unsuitable investment recommendations relating to a memorandum of indebtedness which the customer and issuer entered into. FINRA determined that Tavel violated FINRA Rule 2010 by trying to settle away.
Tavel was discharged by LPL on March 25, 2019 for selling away.
