Morey Herbert Goldberg of Wynnewood Pennsylvania a stockbroker formerly employed by M Holdings Securities Inc. 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 undisclosed outside business activities while registered with the firm. Letter of Acceptance Waiver and Consent No. 2015043333002 (May 30, 2018).
According to the AWC, on October 3, 2014, Goldberg and another individual, LL, were parties to an operating agreement concerning the creation of an LLC, wherein Goldberg and LL undertook management responsibilities within the LLC. Goldberg apparently failed to inform the firm about his involvement with LLC until after the LLC executed four commercial real estate investment transactions.
The AWC stated that the investments, management and creation of the LLC were all activities which Goldberg was not authorized to engage in through his association with the firm. FINRA found that Goldberg’s failure to inform the firm about his outside business activities was violative of FINRA Rule 2010 and 3270.
The AWC additionally stated that from November 9, 2014 and November 18, 2014, eleven prospective customers were provided with a presentation by Goldberg concerning a private offering, where the presentation was neither balanced nor fair. Particularly, FINRA noted that the presentation was unbalanced because there was insufficient information provided to customers concerning the risks pertaining to the issuer of the investment. The presentation reportedly failed to provide prospective customers with an adequate basis to evaluate the investment because there were insufficient details provided to them about how the issuer utilized leveraging and capital matching, or how clawback, return hurdle and carried interest figures impacted the terms of the investment.
Moreover, the AWC stated that the presentation failed to contain data that supported a comparison between the offering and other private equity investments. The AWC also stated that the presentation contained target distributions, expected yields, and target returns – all of which FINRA deemed to be prohibited investment performance projections. Consequently, FINRA found that Goldberg’s conduct was violative of FINRA Rules 2010 and 2210.
Goldberg’s registration with M Holdings Securities Inc. was terminated on January 4, 2017.
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